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Work norms, social insurance and the allocation of talent

Listed author(s):
  • Corneo, Giacomo

This paper challenges the view that weak work norms make generous welfare states economically unsustainable. I develop a dynamic model of family-transmitted values that has a laissez-faire equilibrium with strong work norms coexisting with a social-insurance equilibrium with weak work norms. While the former has better incentives, the latter induces more intergenerational occupational mobility which improves the allocation of talent and fuels growth. Strong work norms arise as a way for parents to protect their children from the risk of lacking talent. I present evidence from microdata showing that generous social insurance correlates with high intergenerational occupational mobility and that more mobile individuals endorse weaker work norms.

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File URL: http://www.sciencedirect.com/science/article/pii/S0047272713001722
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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 107 (2013)
Issue (Month): C ()
Pages: 79-92

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Handle: RePEc:eee:pubeco:v:107:y:2013:i:c:p:79-92
DOI: 10.1016/j.jpubeco.2013.09.002
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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  1. Corneo, Giacomo, 2013. "Work norms, social insurance and the allocation of talent," Discussion Papers 2013/12, Free University Berlin, School of Business & Economics.
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  19. Fershtman, C. & Murphy, K.M., 1993. "Social Status, Education and Growth," Papers 8-93, Tel Aviv.
  20. Giacomo Corneo & Olivier Jeanne, 2007. "A Theory of Tolerance," CESifo Working Paper Series 1941, CESifo Group Munich.
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  22. Jean-Baptiste Michau, 2009. "Unemployment Insurance and Cultural Transmission: Theory and Application to European Unemployment," CEP Discussion Papers dp0936, Centre for Economic Performance, LSE.
  23. Alberto Bisin & Thierry Verdier, 2000. ""Beyond the Melting Pot": Cultural Transmission, Marriage, and the Evolution of Ethnic and Religious Traits," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 955-988.
  24. Matteo Cervellati & Paolo Vanin, 2010. "”Thou shalt not covet ...”: Prohibitions, Temptation and Moral Values," Working Papers 2010.54, Fondazione Eni Enrico Mattei.
  25. Bingley, Paul & Corak, Miles & Westergård-Nielsen, Niels C., 2011. "The Intergenerational Transmission of Employers in Canada and Denmark," IZA Discussion Papers 5593, Institute for the Study of Labor (IZA).
  26. Arcidiacono, Peter, 2002. "Ability Sorting and the Returns to College Major," Working Papers 02-26, Duke University, Department of Economics.
  27. Corneo, Giacomo & Jeanne, Olivier, 2007. "Symbolic Values, Occupational Choice, and Economic Development," IZA Discussion Papers 2763, Institute for the Study of Labor (IZA).
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