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

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  • Martin Halla
  • Mario Lackner
  • Friedrich 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 crowded out by adverse medium and long run effects.

Suggested Citation

  • 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.
    • Handle: RePEc:ces:ceswps:_2641
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    Citations

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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. Daniel Arnold, 2013. "Benefit Morale and Cross-Country Diversity in Sick Pay Entitlements," Kyklos, Wiley Blackwell, vol. 66(1), pages 27-45, February.
    3. Giacomo Corneo, 2012. "Work Norms and the Welfare State," CESifo Economic Studies, CESifo Group, vol. 58(4), pages 599-625, December.
    4. Friedrich Heinemann, 2011. "Economic crisis and morale," European Journal of Law and Economics, Springer, vol. 32(1), pages 35-49, August.
    5. Adrian Chadi, 2012. "Employed But Still Unhappy? On the Relevance of the Social Work Norm," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(1), pages 1-26.
    6. 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.
    7. Cullis, John & Jones, Philip & Lewis, Alan & Castiglioni, Cinzia & Lozza, Edoardo, 2015. "Do poachers make harsh gamekeepers? Attitudes to tax evasion and to benefit fraud," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 58(C), pages 124-131.
    8. Michael Funke & Marc Gronwald, 2009. "A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth," Quantitative Macroeconomics Working Papers 20906, Hamburg University, Department of Economics.
    9. Martin Halla & Mario Lackner & Friedrich G. Schneider, 2010. "An Empirical Analysis of the Dynamics of the Welfare State: The Case of Benefit Morale," Kyklos, Wiley Blackwell, vol. 63(1), pages 55-74, February.
    10. Barile, Lory & Cullis, John & Philip Jones, 2022. "Aint that a Shame : False Tax Declarations and Fraudulent Benefit Claims," The Warwick Economics Research Paper Series (TWERPS) 1435, University of Warwick, Department of Economics.
    11. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    12. Martin Halla, 2011. "The Link between the Intrinsic Motivation to Comply and Compliance Behaviour: A Critical Appraisal of Existing Evidence," Chapters, in: Friedrich Schneider (ed.), Handbook on the Shadow Economy, chapter 11, Edward Elgar Publishing.
    13. Giacomo Corneo & Frank Neher, 2014. "Income inequality and self-reported values," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(1), pages 49-71, March.
    14. 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.
    15. repec:aia:ginidp:dp17 is not listed on IDEAS
    16. Andrea Celico & Martin Rode, 2024. "Can we all be Denmark? The role of civic attitudes in welfare state reforms," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 51(1), pages 87-125, February.
    17. Schnellenbach, Jan & Schubert, Christian, 2014. "Behavioral public choice: A survey," Freiburg Discussion Papers on Constitutional Economics 14/03, Walter Eucken Institut e.V..
    18. Gubello, Michele, 2024. "Social trust and the support for universal basic income," European Journal of Political Economy, Elsevier, vol. 81(C).
    19. Moro-Egido, Ana I. & Solano-García, Ángel, 2020. "Does the perception of benefit fraud shape tax attitudes in Europe?," Journal of Policy Modeling, Elsevier, vol. 42(5), pages 1085-1105.
    20. Giacomo Corneo, 2011. "GINI DP 17: Income Inequality, Value Systems and Macroeconomic Performance," GINI Discussion Papers 17, AIAS, Amsterdam Institute for Advanced Labour Studies.
    21. Hansen, Kerstin F. & Stutzer, Alois, 2021. "Experiencing Booms and Busts in the Welfare State and Support for Redistribution," IZA Discussion Papers 14327, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    welfare state; social norms; benefit fraud; benefit morale;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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