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Is the Welfare State Self-Destructive? A Study of Government Benefit Morale

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  • Friedrich Heinemann

Abstract

The concern that generous welfare state institutions may in the long-run undermine social norms which limit the disincentives of social security systems is as old as the welfare state itself. Already in the 1930s, Franklin D. Roosevelt warned of the 'moral disintegration' effect of welfare dependency. This study assesses the empirical validity of this concern. Based on the results of four waves of the World Value Surveys the individual and country-specific determinants of benefit morale - defined as the reluctance to claim government benefits without legal entitlement - are analysed. The results support the empirical relevance of these worries: In the long-run an increase of government benefits and unemployment is associated with deteriorating welfare state ethics. Copyright 2008 The Authors.

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  • Friedrich Heinemann, 2008. "Is the Welfare State Self-Destructive? A Study of Government Benefit Morale," Kyklos, Wiley Blackwell, vol. 61(2), pages 237-257, May.
  • Handle: RePEc:bla:kyklos:v:61:y:2008:i:2:p:237-257
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    Cited by:

    1. Lindbeck, Assar & Persson, Mats, 2015. "Norms, Incentives and Information in Income Insurance," Working Paper Series 1058, Research Institute of Industrial Economics.
    2. Giacomo Corneo, 2012. "Work Norms and the Welfare State," CESifo Economic Studies, CESifo, vol. 58(4), pages 599-625, December.
    3. Friedrich Heinemann, 2011. "Economic crisis and morale," European Journal of Law and Economics, Springer, vol. 32(1), pages 35-49, August.
    4. Jan Schnellenbach, 2015. "Does classical liberalism imply an evolutionary approach to policy-making?," Journal of Bioeconomics, Springer, vol. 17(1), pages 53-70, April.
    5. Adrian Chadi, 2012. "Employed But Still Unhappy? On the Relevance of the Social Work Norm," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(1), pages 1-26.
    6. Adrian Chadi, 2014. "Regional unemployment and norm-induced effects on life satisfaction," Empirical Economics, Springer, vol. 46(3), pages 1111-1141, May.
    7. Heinemann Friedrich, 2010. "Ansatzpunkte einer Gewissensökonomik / Approaches to the economics of consciense," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 61(1), pages 151-168, January.
    8. Andrés Rodríguez-Pose & Vassilis Tselios, 2012. "Welfare Regimes and the Incentives to Work and Get Educated," Environment and Planning A, , vol. 44(1), pages 125-149, January.
    9. Cullis, John & Jones, Philip & Lewis, Alan & Castiglioni, Cinzia & Lozza, Edoardo, 2015. "Do poachers make harsh gamekeepers? Attitudes to tax evasion and to benefit fraud," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 58(C), pages 124-131.
    10. Martin Halla & Mario Lackner & Friedrich Schneider, 2009. "An Empirical Analysis of the Dynamics of the Welfare State: the Case of Benefit Morale," CESifo Working Paper Series 2641, CESifo Group Munich.
    11. Martin Halla & Mario Lackner & Friedrich G. Schneider, 2010. "An Empirical Analysis of the Dynamics of the Welfare State: The Case of Benefit Morale -super-," Kyklos, Wiley Blackwell, vol. 63(1), pages 55-74, February.
    12. Axel Möhlmann, 2014. "Persistence or Convergence? The East-West Tax-Morale Gap in Germany," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 70(1), pages 3-30, March.
    13. Bernd Hayo & Florian Neumeier, 2012. "Leaders’ Impact on Public Spending Priorities: The Case of the German Laender," Kyklos, Wiley Blackwell, vol. 65(4), pages 480-511, November.
    14. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    15. Martin Halla, 2011. "The Link between the Intrinsic Motivation to Comply and Compliance Behaviour: A Critical Appraisal of Existing Evidence," Chapters,in: Handbook on the Shadow Economy, chapter 11 Edward Elgar Publishing.
    16. Giacomo Corneo & Frank Neher, 2014. "Income inequality and self-reported values," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(1), pages 49-71, March.
    17. Hennighausen, Tanja & Heinemann, Friedrich & Bischoff, Ivo, 2008. "Individual Determinants of Social Fairness Assessments: The Case of Germany," ZEW Discussion Papers 08-063, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    18. Zohal Hessami, 2010. "The Size and Composition of Government Spending in Europe and Its Impact on Well-Being," Kyklos, Wiley Blackwell, vol. 63(3), pages 346-382, August.
    19. repec:aia:ginidp:dp17 is not listed on IDEAS
    20. Schnellenbach, Jan & Schubert, Christian, 2014. "Behavioral public choice: A survey," Freiburg Discussion Papers on Constitutional Economics 14/03, Walter Eucken Institut e.V..
    21. Martin Halla & Friedrich G. Schneider, 2005. "Taxes and Benefits: Two Distinct Options to Cheat on the State?," Economics working papers 2005-05, Department of Economics, Johannes Kepler University Linz, Austria.
    22. Giacomo Corneo, 2011. "GINI DP 17: Income Inequality, Value Systems and Macroeconomic Performance," GINI Discussion Papers 17, AIAS, Amsterdam Institute for Advanced Labour Studies.

    More about this item

    JEL classification:

    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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