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Work values, endogenous sentiments redistribution

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  • Cervellati, Matteo
  • Esteban, Joan
  • Kranich, Laurence

Abstract

We examine the interactions between individual behavior, sentiments and the social contract in a model of rational voting over redistribution. Agents have moral "work values". Individuals' self-esteem and social consideration of others are endogenously determined comparing behaviors to moral standards. Attitudes toward redistribution depend on self-interest and social preferences. We characterize the politico-economic equilibria in which sentiments, labor supply and redistribution are determined simultaneously. The equilibria feature different degrees of "social cohesion" and redistribution depending on pre-tax income inequality. In clustered equilibria the poor are held partly responsible for their low income since they work less than the moral standard and hence redistribution is low. The paper proposes a novel explanation for the emergence of different sentiments and social contracts across countries. The predictions appear broadly in line with well-documented differences between the United States and Europe.

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Bibliographic Info

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

Volume (Year): 94 (2010)
Issue (Month): 9-10 (October)
Pages: 612-627

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Handle: RePEc:eee:pubeco:v:94:y:2010:i:9-10:p:612-627

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

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Keywords: Social contract Endogenous sentiments Voting over taxes Moral work values Redistribution Income inequality Politico-economic equilibria;

References

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Cited by:
  1. Matteo Cervellati & Paolo Vanin, 2010. "”Thou shalt not covet ...”: Prohibitions, Temptation and Moral Values," Working Papers 2010.54, Fondazione Eni Enrico Mattei.
  2. SCHOKKAERT, Erik & TRUYTS, Tom, 2014. "Preferences for redistribution and social structure," CORE Discussion Papers 2014001, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Robin Boadway & Nicolas-Guillaume Martineau, 2013. "Normative Analysis with Societal Constraints," CESifo Working Paper Series 4305, CESifo Group Munich.
  4. Samuel Bowles & Sandra Polania-Reyes, 2011. "Economic incentives and social preferences: substitutes or complements?," Department of Economics University of Siena 617, Department of Economics, University of Siena.
  5. Corneo, Giacomo, 2013. "Work norms, social insurance and the allocation of talent," Discussion Papers 2013/12, Free University Berlin, School of Business & Economics.
  6. Corneo, Giacomo, 2013. "Work norms, social insurance and the allocation of talent," Journal of Public Economics, Elsevier, vol. 107(C), pages 79-92.
  7. 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.

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