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Work norms, social insurance and the allocation of talent

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  • Corneo, Giacomo
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    Abstract

    This paper challenges the view that weak work norms make generous welfare states economically unsustainable. I develop a dynamic model of family-transmitted values that has a laissez-faire equilibrium with strong work norms coexisting with a social-insurance equilibrium with weak work norms. While the former has better incentives, the latter induces more intergenerational occupational mobility which improves the allocation of talent and fuels growth. Strong work norms arise as a way for parents to protect their children from the risk of lacking talent. I present evidence from microdata showing that generous social insurance correlates with high intergenerational occupational mobility and that more mobile individuals endorse weaker work norms.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Public Economics.

    Volume (Year): 107 (2013)
    Issue (Month): C ()
    Pages: 79-92

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    Handle: RePEc:eee:pubeco:v:107:y:2013:i:c:p:79-92

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    Web page: http://www.elsevier.com/locate/inca/505578

    Related research

    Keywords: Work norms; Unemployment insurance; Occupational mobility; Economic growth;

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    16. Giacomo Corneo, 2012. "Work Norms and the Welfare State," CESifo Economic Studies, CESifo, vol. 58(4), pages 599-625, December.
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    19. Lindbeck, Assar & Nyberg, Sten & Weibull, Jörgen W., 1997. "Social Norms and Economic Incentives in the Welfare State," Working Paper Series 476, Research Institute of Industrial Economics.
    20. Corneo, Giacomo, 2013. "Work Norms, Social Insurance and the Allocation of Talent," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 405, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    21. Giacomo Corneo & Olivier Jeanne, 2007. "A Theory of Tolerance," CESifo Working Paper Series 1941, CESifo Group Munich.
    22. Bingley, Paul & Corak, Miles & Westergård-Nielsen, Niels C., 2011. "The Intergenerational Transmission of Employers in Canada and Denmark," IZA Discussion Papers 5593, Institute for the Study of Labor (IZA).
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    24. Lindbeck, Assar & Nyberg, Sten, 2001. "Raising Children To Work Hard: Altruism, Work Norms And Social Insurance," Seminar Papers 691, Stockholm University, Institute for International Economic Studies.
    25. Corneo, Giacomo & Jeanne, Olivier, 2007. "Symbolic Values, Occupational Choice, and Economic Development," IZA Discussion Papers 2763, Institute for the Study of Labor (IZA).
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