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Welfare regimes and the incentives to work and get educated

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  • Andrés Rodríguez-Pose
  • Vassilis Tselios

Abstract

This paper examines whether differences in welfare regimes shape the incentives to work and get educated. Using microeconomic data for more than 100 000 European individuals, we show that welfare regimes make a difference for wages and education. First, people-based and household-based effects (internal returns to education, and household wage and education externalities) generate socioeconomic incentives for people to get an education and work which are stronger in countries with the weakest welfare systems, that is, those with what is known as ‘residual’ welfare regimes (Greece, Italy, Spain and Portugal). Second, place-based effects and, more specifically, differences in regional wage per capita and educational endowment and in regional interpersonal income and educational inequality, also influence wages and education in different ways across welfare regimes. Place-based effects have the greatest impact in the Nordic social-democratic welfare systems. The results are robust to the inclusion of a large number of people-based and place-based controls. Keywords: welfare regimes, wages, education, incentives, regions, EU

Suggested Citation

  • Andrés Rodríguez-Pose & Vassilis Tselios, 2012. "Welfare regimes and the incentives to work and get educated," Environment and Planning A, Pion Ltd, London, vol. 44(1), pages 125-149, January.
  • Handle: RePEc:pio:envira:v:44:y:2012:i:1:p:125-149
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    Cited by:

    1. Tsatsos, Aristidis, 2011. "Working in Southern Europe in Times of Crisis – Myths and Demons," MPRA Paper 45237, University Library of Munich, Germany, revised Jul 2011.

    More about this item

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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