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Social Norms And Economic Incentives In The Welfare State

  • Assar Lindbeck
  • Sten Nyberg
  • Jšrgen W. Weibull

This paper analyzes the interplay between social norms and economic incentives in the context of work decisions in the modern welfare state. We assume that to live off one's own work is a social norm, and that the larger the population share adhering to this norm, the more intensely it is felt by the individual. Individuals face two choices: one economic, whether to work or live off public transfers; and one political, how large the transfer should be. The size of the transfer and the intensity of the social norm are determined endogenously in equilibrium. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Article provided by MIT Press in its journal The Quarterly Journal of Economics.

Volume (Year): 114 (1999)
Issue (Month): 1 (February)
Pages: 1-35

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Handle: RePEc:tpr:qjecon:v:114:y:1999:i:1:p:1-35
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  1. Sundén, David & Weibull, Jörgen W., 1997. "A Note on Social Norms and Transfers," Working Paper Series 478, Research Institute of Industrial Economics.
  2. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  3. Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, vol. 8(3), pages 329-340, December.
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