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Social insurance, work norms, and the allocation of talent

  • Corneo, Giacomo

Across countries, generous social insurance comes along with weak work norms. This finding is often taken to mean that in the long run social insurance generates large output losses. But neither individual nor country data corroborates the view that weak work norms worsen economic performance. This paper offers a model of endogenous work norms that rationalizes that evidence. Weak work norms do not harm labor productivity because they are associated with an improved allocation of individual talents to occupations, while strong work norms arise as a defensive strategy of parents aiming at perpetueting their occupation along family lines. Evidence from microdata supports the view that (i) social insurance favors intergenerational occupational mobility and (ii) more mobile individuals endorse weaker work norms.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9028.

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Date of creation: Jun 2012
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Handle: RePEc:cpr:ceprdp:9028
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  1. Giacomo Corneo & Olivier Jeanne, 2007. "A Theory of Tolerance," CESifo Working Paper Series 1941, CESifo Group Munich.
  2. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 503-30, May.
  3. Roland Benabou & Jean Tirole, 2005. "Belief in a Just World and Redistributive Politics," NBER Working Papers 11208, National Bureau of Economic Research, Inc.
  4. Lindbeck, Assar & Nyberg, Sten, 2001. "Raising Children to Work Hard: Altruism, Work Norms and Social Insurance," Working Paper Series 557, Research Institute of Industrial Economics.
  5. Mark Gradstein, 2009. "Work Attitudes and Intergenerational Mobility," Journal of Human Capital, University of Chicago Press, vol. 3(3), pages 268-288.
  6. Maria Knoth Humlum & Kristin J. Kleinjans & Helena Skyt Nielsen, 2007. "An Economic Analysis of Identity and Career Choice," Economics Working Papers 2007-14, School of Economics and Management, University of Aarhus.
  7. Arcidiacono, Peter, 2004. "Ability sorting and the returns to college major," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 343-375.
  8. Hans Peter Gruner & Giacomo Corneo, 2000. "Social Limits to Redistribution," American Economic Review, American Economic Association, vol. 90(5), pages 1491-1507, December.
  9. Bisin, A. & Verdier, T., 1999. "Beyond the Melting Pot: Cultural Transmission, Marriage, and the Evolution of Ethnic and Religious Traits," Papers 1999-10, Laval - Laboratoire Econometrie.
  10. Dolton, P J & Makepeace, G H & Van Der Klaauw, W, 1989. "Occupational Choice and Earnings Determination: The Role of Sample Selection and Non-pecuniary Factors," Oxford Economic Papers, Oxford University Press, vol. 41(3), pages 573-94, July.
  11. Giacomo Corneo, 2012. "Work Norms and the Welfare State," CESifo Economic Studies, CESifo, vol. 58(4), pages 599-625, December.
  12. repec:cup:cbooks:9780521827607 is not listed on IDEAS
  13. Lindbeck, Assar, 1997. "Incentives and Social Norms in Household Behavior," Seminar Papers 622, Stockholm University, Institute for International Economic Studies.
  14. 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.
  15. Laurence Kranich & Matteo Cervellati & Joan Esteban, 2010. "Work Values, Endogenous Sentiments and Redistribution," Discussion Papers 10-05, University at Albany, SUNY, Department of Economics.
  16. Lindbeck, Assar & Nyberg, Sten & Weibull, Jörgen W., 1997. "Social Norms and Economic Incentives in the Welfare State," Working Paper Series 476, Research Institute of Industrial Economics.
  17. 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).
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