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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
Martin Halla
Mario Lackner
Friedrich G. Schneider

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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 Department of Economics, Johannes Kepler University Linz, Austria in its series Economics working papers with number 2009-04.

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Length: 28 pages
Date of creation: Apr 2009
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Handle: RePEc:jku:econwp:2009_04

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

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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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  17. 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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(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. 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!]
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  2. 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:
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