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

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Author Info
Halla, Martin () (University of Linz)
Lackner, Mario () (University of Linz)
Schneider, Friedrich () (University of Linz)

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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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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4165.

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Date of creation: May 2009
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Handle: RePEc:iza:izadps:dp4165

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

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Find related papers by JEL classification:
A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
I30 - Health, Education, and Welfare - - Welfare and Poverty - - - General
I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings
J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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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.:
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  4. Kolm, Serge-Christophe, 1973. "A note on optimum tax evasion," Journal of Public Economics, Elsevier, vol. 2(3), pages 265-270, July. [Downloadable!] (restricted)
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  6. Lindbeck, Assar, 2008. "Prospects for the Welfare State," Seminar Papers 755, Stockholm University, Institute for International Economic Studies. [Downloadable!]
  7. Magnus Henrekson & Mats Persson, 2004. "The Effects on Sick Leave of Changes in the Sickness Insurance System," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 87-114, January. [Downloadable!]
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  8. Assar Lindbeck & Sten Nyberg & Joerg Weibull, 2003. "Social Norms and Welfare State Dynamics," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  9. Jerry L. Kingston & Paul L. Burgess & Robert D. St. Louis, 1986. "Unemployment insurance overpayments: Evidence and implications," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 39(3), pages 323-336, April.
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  11. Lindbeck, Assar, 1995. " Welfare State Disincentives with Endogenous Habits and Norms," Scandinavian Journal of Economics, Blackwell Publishing, vol. 97(4), pages 477-94, December.
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  12. Halla, Martin & Schneider, Friedrich, 2008. "Taxes and Benefits: Two Distinct Options to Cheat on the State?," IZA Discussion Papers 3536, Institute for the Study of Labor (IZA). [Downloadable!]
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  13. Boskin, Michael J, 1974. "The Effects of Government Expenditures and Taxes on Female Labor," American Economic Review, American Economic Association, vol. 64(2), pages 251-56, May. [Downloadable!] (restricted)
  14. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June. [Downloadable!] (restricted)
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  15. 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)
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  16. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July. [Downloadable!] (restricted)
  17. Lindbeck, Assar, 2008. "Prospects for the Welfare State," Working Paper Series 731, Research Institute of Industrial Economics. [Downloadable!]
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Cited by:
(explanations, 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. Axel Dreher & Justina A.V. Fischer, 2009. "Government Decentralization as a Disincentive for Transnational Terror? An Empirical Analysis," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  2. Stergios Skaperdas, 2009. "The Costs of Organized Violence: A Review of the Evidence," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
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