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Work values, endogenous sentiments redistribution

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  • Cervellati, Matteo
  • Esteban, Joan
  • Kranich, Laurence

Abstract

We examine the interactions between individual behavior, sentiments and the social contract in a model of rational voting over redistribution. Agents have moral "work values". Individuals' self-esteem and social consideration of others are endogenously determined comparing behaviors to moral standards. Attitudes toward redistribution depend on self-interest and social preferences. We characterize the politico-economic equilibria in which sentiments, labor supply and redistribution are determined simultaneously. The equilibria feature different degrees of "social cohesion" and redistribution depending on pre-tax income inequality. In clustered equilibria the poor are held partly responsible for their low income since they work less than the moral standard and hence redistribution is low. The paper proposes a novel explanation for the emergence of different sentiments and social contracts across countries. The predictions appear broadly in line with well-documented differences between the United States and Europe.

Suggested Citation

  • Cervellati, Matteo & Esteban, Joan & Kranich, Laurence, 2010. "Work values, endogenous sentiments redistribution," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 612-627, October.
  • Handle: RePEc:eee:pubeco:v:94:y:2010:i:9-10:p:612-627
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    2. Gilles Le Garrec, 2014. "Fairness, socialization and the cultural deman for redistribution," Sciences Po publications 2014-20, Sciences Po.
    3. Corneo, Giacomo, 2013. "Work norms, social insurance and the allocation of talent," Journal of Public Economics, Elsevier, vol. 107(C), pages 79-92.
    4. Samuel Bowles & Sandra Polania-Reyes, 2011. "Economic incentives and social preferences: substitutes or complements?," Department of Economics University of Siena 617, Department of Economics, University of Siena.
    5. Erik Schokkaert & Tom Truyts, 2017. "Preferences for redistribution and social structure," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 545-576, December.
    6. Garance Genicot, 2019. "Tolerance and Compromise in Social Networks," NBER Working Papers 25506, National Bureau of Economic Research, Inc.
    7. Corneo, Giacomo, 2012. "Social insurance, work norms, and the allocation of talent," CEPR Discussion Papers 9028, C.E.P.R. Discussion Papers.
    8. Cervellati, Matteo & Vanin, Paolo, 2013. "“Thou shalt not covet”: Prohibitions, temptation and moral values," Journal of Public Economics, Elsevier, vol. 103(C), pages 15-28.
    9. Corneo, Giacomo & Neher, Frank, 2015. "Democratic redistribution and rule of the majority," European Journal of Political Economy, Elsevier, vol. 40(PA), pages 96-109.
    10. Robin Boadway & Nicolas-Guillaume Martineau, 2013. "Normative Analysis with Societal Constraints," CESifo Working Paper Series 4305, CESifo.
    11. Gilles Le Garrec, 2018. "Fairness, social norms and the cultural demand for redistribution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 50(2), pages 191-212, February.
    12. Gilles Le Garrec, 2014. "Fairness, socialization and the cultural deman for redistribution," Documents de Travail de l'OFCE 2014-20, Observatoire Francais des Conjonctures Economiques (OFCE).
    13. Luna Bellani & Heinrich Ursprung, 2016. "The Political Economy of Redistribution Policy," CESifo Working Paper Series 6189, CESifo.

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