This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Unemployment Insurance and Cultural Transmission: Theory and Application to European Unemployment

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Jean-Baptiste Michau
Abstract

This paper emphasizes the two-way causality between the provision of unemployment insurance andthe cultural transmission of work ethic. Values affect the size of the moral-hazard problem and, hence,the policy to be implemented. Conversely, when parents rationally choose how much effort to exert toraise their children to work hard, they form expectations on the policy that will be implemented by thenext generation. In this context, I determine the dynamics of preferences across generations and showthat the different cultural traits, i.e. high and low work ethics, are complementary. The model couldgenerate a lag between the introduction of unemployment insurance and a deterioration of the workethic. Relying on a calibration, I argue that it can account for a substantial fraction of the history ofEuropean unemployment since World War II. As this explanation is compatible with the co- existenceof generous unemployment insurance and low unemployment in the 1950s and 1960s, it could be seenas an alternative to the dominant story that relies on the occurrence of large shocks since the 1970s.Supportive empirical evidence is provided.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://cep.lse.ac.uk/pubs/download/dp0936.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0936.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:cep:cepdps:dp0936

Contact details of provider:
Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

For technical questions regarding this item, or to correct its listing, contact: ().

Related research
Keywords: cultural transmission; European unemployment; unemployment insurance; work ethic;

Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings
Z10 - Other Special Topics - - Cultural Economics - - - General

This paper has been announced in the following NEP Reports:

This item is featured on the following reading lists:
  1. Economic Logic blog
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13. [Downloadable!]
    Other versions:
  2. Assar Lindbeck & Sten Nyberg, 2006. "Raising Children to Work Hard: Altruism, Work Norms, and Social Insurance," The Quarterly Journal of Economics, MIT Press, vol. 121(4), pages 1473-1503, November. [Downloadable!] (restricted)
    Other versions:
  3. Aghion, Philippe & Algan, Yann & Cahuc, Pierre, 2008. "Can Policy Interact with Culture? Minimum Wage and the Quality of Labor Relations," IZA Discussion Papers 3680, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2006. "Does Culture Affect Economic Outcomes?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 23-48, Spring.
    Other versions:
  5. María Sáez-Martí & Anna Sjögren, 2008. "Peers and Culture," Scandinavian Journal of Economics, Blackwell Publishing, vol. 110(1), pages 73-92, 03. [Downloadable!] (restricted)
  6. Alberto Alesina & George-Marios Angeletos, 2005. "Fairness and Redistribution," American Economic Review, American Economic Association, vol. 95(4), pages 960-980, September. [Downloadable!]
    Other versions:
  7. Guido Tabellini, 2008. "The Scope of Cooperation: Values and Incentives," The Quarterly Journal of Economics, MIT Press, vol. 123(3), pages 905-950, August. [Downloadable!] (restricted)
    Other versions:
  8. Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April. [Downloadable!] (restricted)
    Other versions:
  9. Guido Tabellini, 2007. "Institutions and Culture," Working Papers 330, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
  10. Christopher A. Pissarides & Giovanna Vallanti, 2007. "The Impact Of Tfp Growth On Steady-State Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 607-640, 05. [Downloadable!] (restricted)
    Other versions:
  11. Algan, Yann & Cahuc, Pierre, 2005. "The Roots of Low European Employment: Family Culture?," CEPR Discussion Papers 5169, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  12. Bisin, Alberto & Patacchini, Eleonora & Verdier, Thierry & Zenou, Yves, 2006. "'Bend It Like Beckham': Identity, Socialization and Assimilation," CEPR Discussion Papers 5662, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  13. Lemieux, Thomas & MacLeod, W. Bentley, 2000. "Supply side hysteresis: the case of the Canadian unemployment insurance system," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 139-170, October. [Downloadable!] (restricted)
    Other versions:
  14. Maria Saez-Marti & Yves Zenou, 2007. "Cultural Transmission and Discrimination," IEW - Working Papers iewwp348, Institute for Empirical Research in Economics - IEW. [Downloadable!]
    Other versions:
  15. Roland Bénabou & Jean Tirole, 2006. "Belief in a Just World and Redistributive Politics," The Quarterly Journal of Economics, MIT Press, vol. 121(2), pages 699-746, May. [Downloadable!] (restricted)
    Other versions:
  16. 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. [Downloadable!] (restricted)
    Other versions:
  17. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March. [Downloadable!] (restricted)
    Other versions:
  18. Yann Algan & Pierre Cahuc, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-45, January. [Downloadable!]
  19. Patacchini, Eleonora & Zenou, Yves, 2004. "Intergenerational Education Transmission: Neighborhood Quality and/or Parents' Involvement?," Working Paper Series 631, Research Institute of Industrial Economics. [Downloadable!]
    Other versions:
  20. Lars Ljungqvist & Thomas J. Sargent, 2008. "Two Questions about European Unemployment," Econometrica, Econometric Society, vol. 76(1), pages 1-29, 01. [Downloadable!] (restricted)
  21. Matthias Doepke & Fabrizio Zilibotti, 2008. "Occupational Choice and the Spirit of Capitalism," The Quarterly Journal of Economics, MIT Press, vol. 123(2), pages 747-793, 05. [Downloadable!] (restricted)
    Other versions:
  22. Johannes Hörner & L. Rachel Ngai & Claudia Olivetti, 2007. "Public Enterprises And Labor Market Performance," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 363-384, 05. [Downloadable!] (restricted)
    Other versions:
  23. Lars Ljungqvist & Thomas J. Sargent, 1998. "The European Unemployment Dilemma," Journal of Political Economy, University of Chicago Press, vol. 106(3), pages 514-550, June. [Downloadable!] (restricted)
    Other versions:
  24. Stephen Nickell & Luca Nunziata & Wolfgang Ochel, 2005. "Unemployment in the OECD Since the 1960s. What Do We Know?," Economic Journal, Royal Economic Society, vol. 115(500), pages 1-27, 01. [Downloadable!] (restricted)
  25. Alberto Bisin & Giorgio Topa & Thierry Verdier, 2004. "Religious Intermarriage and Socialization in the United States," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 615-664, June.
Full references

Statistics
Access and download statistics

Did you know? LogEc provides statistical analysis about downloads from this service (and others).

This page was last updated on 2009-11-18.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.