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

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  • Martin Halla
  • Mario Lackner
  • Friedrich G. 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 (partly) crowded out by adverse medium and long run effects. In contrast to earlier studies we do not find that younger birth cohorts have lower values of benefit morale. Copyright © 2010 Blackwell Publishing Ltd.

Suggested Citation

  • 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.
  • Handle: RePEc:bla:kyklos:v:63:y:2010:i:1:p:55-74
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    References listed on IDEAS

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    1. Assar Lindbeck & Sten Nyberg & Jörgen W. Weibull, 1999. "Social Norms and Economic Incentives in the Welfare State," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 1-35.
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    5. 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.
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    Cited by:

    1. Sjöberg, Ola, 2017. "Positive welfare state dynamics? Sickness benefits and sickness absence in Europe 1997–2011," Social Science & Medicine, Elsevier, vol. 177(C), pages 158-168.
    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. 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.
    5. Philipp Doerrenberg & Denvil Duncan & Clemens Fuest & Andreas Peichl, 2014. "Nice Guys Finish Last: Do Honest Taxpayers Face Higher Tax Rates?," Kyklos, Wiley Blackwell, vol. 67(1), pages 29-53, February.

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