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An Empirical Analysis of the Dynamics of the Welfare State: the Case of Benefit Morale

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  • Martin Halla
  • Mario Lackner
  • Friedrich Schneider

Abstract

Does the supply of a welfare state create its own demand? Many economic scholars studying welfare arrangements refer to Say’s law and insinuate a self-destructive welfare state. However, little is known about the empirical validity of these assumptions and hypotheses. We study the dynamic effect of different welfare arrangements on benefit fraud. In particular, we analyze the impact of the welfare state on the respective social norm, i. e. benefit morale. It turns out that a high level of public social expenditures and a high unemployment rate are associated with a small positive (or no) immediate impact on benefit morale, which however is crowded out by adverse medium and long run effects.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2641.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2641

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Keywords: welfare state; social norms; benefit fraud; benefit morale;

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  1. Lindbeck, Assar & Nyberg, Sten & Weibull, Jörgen W., 2002. "Social Norms and Welfare State Dynamics," Working Paper Series 585, Research Institute of Industrial Economics.
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Cited by:
  1. repec:aia:ginidp:dp17 is not listed on IDEAS
  2. Adrian Chadi, 2011. "Employed but Still Unhappy?: On the Relevance of the Social Work Norm," SOEPpapers on Multidisciplinary Panel Data Research 353, DIW Berlin, The German Socio-Economic Panel (SOEP).
  3. Friedrich Heinemann, 2009. "Economic Crisis and Morale," Working Papers CEB 09-046.RS, ULB -- Universite Libre de Bruxelles.
  4. Schnellenbach, Jan & Schubert, Christian, 2014. "Behavioral public choice: A survey," Freiburg Discussion Papers on Constitutional Economics 14/03, Walter Eucken Institut e.V..
  5. Corneo, Giacomo & Neher, Frank, 2012. "Income Inequality and Self-Reported Values," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 382, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  6. Daniel Arnold, 2012. "Benefit Morale and Cross-Country Diversity in Sick Pay Entitlements," IAAEU Discussion Papers 201211, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  7. Michael Funke & Marc Gronwald, 2009. "A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth," Quantitative Macroeconomics Working Papers 20906, Hamburg University, Department of Economics.
  8. Giacomo Corneo, 2011. "GINI DP 17: Income Inequality, Value Systems and Macroeconomic Performance," GINI Discussion Papers 17, AIAS, Amsterdam Institute for Advanced Labour Studies.
  9. Halla, Martin, 2010. "The Link between the Intrinsic Motivation to Comply and Compliance Behavior: A Critical Appraisal of Existing Evidence," IZA Discussion Papers 4843, Institute for the Study of Labor (IZA).

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