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Is the Welfare State Self-Destructive? A Study of Government Benefit Morale

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  • Friedrich Heinemann

Abstract

The concern that generous welfare state institutions may in the long-run undermine social norms which limit the disincentives of social security systems is as old as the welfare state itself. Already in the 1930s, Franklin D. Roosevelt warned of the 'moral disintegration' effect of welfare dependency. This study assesses the empirical validity of this concern. Based on the results of four waves of the World Value Surveys the individual and country-specific determinants of benefit morale - defined as the reluctance to claim government benefits without legal entitlement - are analysed. The results support the empirical relevance of these worries: In the long-run an increase of government benefits and unemployment is associated with deteriorating welfare state ethics. Copyright 2008 The Authors.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Kyklos.

Volume (Year): 61 (2008)
Issue (Month): 2 (05)
Pages: 237-257

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Handle: RePEc:bla:kyklos:v:61:y:2008:i:2:p:237-257

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  1. Assar Lindbeck & Sten Nyberg & Jšrgen W. Weibull, 1999. "Social Norms And Economic Incentives In The Welfare State," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 1-35, February.
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  8. Lindbeck, Assar, 1995. " Welfare State Disincentives with Endogenous Habits and Norms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 477-94, December.
  9. Beck, Thorsten & Clarke, George & Groff, Alberto & Keefer, Philip & Walsh, Patrick, 2000. "New tools and new tests in comparative political economy - the database of political institutions," Policy Research Working Paper Series 2283, The World Bank.
  10. Algan, Yann & Cahuc, Pierre, 2006. "Civic Attitudes and the Design of Labor Market Institutions: Which Countries Can Implement the Danish Flexicurity Model?," IZA Discussion Papers 1928, Institute for the Study of Labor (IZA).
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  12. Lindbeck, Assar, 1995. "Welfare State Disincentives with Endogenous Habits and Norms," Working Paper Series 441, Research Institute of Industrial Economics.
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