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Raising Children to Work Hard: Altruism, Work Norms and Social Insurance

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  • Assar Lindbeck
  • Sten Nyberg

Abstract

Children who can count on support from altruistic parents may not try hard to succeed in the labor market. Moreover, parental altruism makes withdrawal of such support non-credible. To promote work effort, parents may want to instill norms which later cause their children to experience guilt or shame associated with failure to support themselves. While social insurance pools risk across families, we show that it also creates a free-rider problem among parents in terms of norm formation. We also examine the formation of norms requiring children to support their parents financially in old age.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 498.

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Date of creation: 2001
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Handle: RePEc:ces:ceswps:_498

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Keywords: Work norms; social insurance; altruism;

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References

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  1. Lindbeck, Assar & Nyberg, Sten & Weibull, Jörgen W., 1997. "Social Norms and Economic Incentives in the Welfare State," Working Paper Series, Research Institute of Industrial Economics 476, Research Institute of Industrial Economics.
  2. Bisin, Alberto & Verdier, Thierry, 1998. "On the cultural transmission of preferences for social status," Journal of Public Economics, Elsevier, Elsevier, vol. 70(1), pages 75-97, October.
  3. Cremer, H. & Pestieau, P., . "Bequests as a heir ``discipline device''," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1239, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
  5. Lindbeck, A., 1994. "Welfare State Disincentives with Endogenous Habits and Norms," Papers, Stockholm - International Economic Studies 589, Stockholm - International Economic Studies.
  6. Wilhelm, M.O., 1990. "Bequest Behavior And The Effect Of Heirs' Earnings: Testing The Altruistic Model Of Bequests," Papers, Pennsylvania State - Department of Economics 9-90-12, Pennsylvania State - Department of Economics.
  7. CREMER, Helmuth & PESTIEAU, Pierre, . "Delaying inter vivos transmissions under asymmetric information," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1346, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Bergstrom, Theodore C, 1989. "A Fresh Look at the Rotten Kid Theorem--and Other Household Mysteries," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 97(5), pages 1138-59, October.
  9. Lindbeck, Assar & Weibull, Jorgen W, 1986. " Intergenerational Aspects of Public Transfers, Borrowing and Debt," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 88(1), pages 239-67.
  10. Stutzer, Alois & Lalive, Rafael, 2001. "The Role of Social Work Norms in Job Searching and Subjective Well-Being," IZA Discussion Papers 300, Institute for the Study of Labor (IZA).
  11. Vega-Redondo Fernando, 1993. "Competition and Culture in an Evolutionary Process of Equilibrium Selection: A Simple Example," Games and Economic Behavior, Elsevier, Elsevier, vol. 5(4), pages 618-631, October.
  12. Shleifer, Andrei & Summers, Lawrence H. & Bernheim, B. Douglas, 1986. "The Strategic Bequest Motive," Scholarly Articles 3721794, Harvard University Department of Economics.
  13. Binmore, K. & Samuelson, L., 1993. "An Economist's Perspective on the Evolution of Norms," Working papers, Wisconsin Madison - Social Systems 9323, Wisconsin Madison - Social Systems.
  14. Kandori, Michihiro, 1992. "Social Norms and Community Enforcement," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 59(1), pages 63-80, January.
  15. Lindbeck, Assar & Weibull, Jorgen W, 1988. "Altruism and Time Consistency: The Economics of Fait Accompli," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 96(6), pages 1165-82, December.
  16. Hauk, Esther & Sáez-Martí, María, 2001. "On the Cultural Transmission of Corruption," Working Paper Series, Research Institute of Industrial Economics 564, Research Institute of Industrial Economics.
  17. Neil Bruce & Michael Waldman, 1986. "The Rotten-Kid Theorem Meets the Samaritan's Dilemma," Working Papers, Queen's University, Department of Economics 650, Queen's University, Department of Economics.
  18. Becker, Gary S, 1993. "Nobel Lecture: The Economic Way of Looking at Behavior," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(3), pages 385-409, June.
  19. Lindbeck, Assar, 1995. "Welfare State Disincentives with Endogenous Habits and Norms," Working Paper Series, Research Institute of Industrial Economics 441, Research Institute of Industrial Economics.
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