IDEAS home Printed from https://ideas.repec.org/p/diw/diwsop/diw_sp353.html
   My bibliography  Save this paper

Employed but Still Unhappy?: On the Relevance of the Social Work Norm

Author

Listed:
  • Adrian Chadi

Abstract

In the modern welfare state, people who cannot make a living usually receive financial assistance from public funds. Accordingly, the so-called social work norm against living off other people is violated, which may be the reason why the unemployed are so unhappy. If so, however, labour market concepts based on the notion of promoting low-paid jobs that are subsidised if necessary with additional payments would appear far less favourable. It could be that people are employed, but still unhappy. Using German panel data, this paper examines the relevance of the social work norm and finds a significant disutility effect of living off public funds. Although this is true for employed people as well, the results show that the individual is generally better off having a job that requires additional assistance, than having no job at all. On the other hand, such policies as the recent German labour market reforms can trigger undesired side-effects, if policy-makers ignore the issue of the social work norm.

Suggested Citation

  • Adrian Chadi, 2011. "Employed but Still Unhappy?: On the Relevance of the Social Work Norm," SOEPpapers on Multidisciplinary Panel Data Research 353, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp353
    as

    Download full text from publisher

    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.366954.de/diw_sp0353.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Assar Lindbeck & Sten Nyberg & Jörgen W. Weibull, 1999. "Social Norms and Economic Incentives in the Welfare State," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 1-35.
    2. 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.
    3. Eugene Smolensky & Siobhán Reilly & Eirik Evenhouse, 1995. "Should Public Assistance Be Targeted?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 18(1), pages 3-28, September.
    4. Fehr, Ernst & Falk, Armin, 2002. "Psychological foundations of incentives," European Economic Review, Elsevier, vol. 46(4-5), pages 687-724, May.
    5. Andrew E. Clark, 2003. "Unemployment as a Social Norm: Psychological Evidence from Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 289-322, April.
    6. Assar Lindbeck & Sten Nyberg & Jörgen W. Weibull, 2003. "Social Norms and Welfare State Dynamics," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 533-542, 04/05.
    7. Clark, Andrew & Knabe, Andreas & Rätzel, Steffen, 2010. "Boon or bane? Others' unemployment, well-being and job insecurity," Labour Economics, Elsevier, vol. 17(1), pages 52-61, January.
    8. Bruno Frey & Alois Stutzer, 2005. "Happiness Research: State and Prospects," Review of Social Economy, Taylor & Francis Journals, vol. 63(2), pages 207-228.
    9. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-659, May.
    10. Alois Stutzer & Rafael Lalive, 2004. "The Role of Social Work Norms in Job Searching and Subjective Well-Being," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 696-719, June.
    11. Lindbeck, A & Nyberg, S & Weibull, J-W, 1996. "Social Norms, the Welfare State, and Voting," Papers 608, Stockholm - International Economic Studies.
    12. Assar Lindbeck & Sten Nyberg, 2006. "Raising Children to Work Hard: Altruism, Work Norms, and Social Insurance," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1473-1503.
    13. Hedström, Peter & Kolm, Ann-Sofie & Åberg, Yvonne, 2003. "Social interactions and unemployment," Working Paper Series 2003:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    14. Besley, Timothy & Coate, Stephen, 1992. "Understanding welfare stigma: Taxpayer resentment and statistical discrimination," Journal of Public Economics, Elsevier, vol. 48(2), pages 165-183, July.
    15. Azar, Ofer H., 2004. "What sustains social norms and how they evolve?: The case of tipping," Journal of Economic Behavior & Organization, Elsevier, vol. 54(1), pages 49-64, May.
    16. James Alm & Gary H. McClelland & William D. Schulze, 1999. "Changing the Social Norm of Tax Compliance by Voting," Kyklos, Wiley Blackwell, vol. 52(2), pages 141-171, May.
    17. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-1035, December.
    18. Andrew Clark & Andreas Knabe & Steffen Rätzel, 2009. "Unemployment as a Social Norm in Germany," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 129(2), pages 251-260.
    19. Dirk Sliwka, 2007. "Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes," American Economic Review, American Economic Association, vol. 97(3), pages 999-1012, June.
    20. repec:hhs:iuiwop:557 is not listed on IDEAS
    21. Torgler Benno & Frey Bruno S. & Wilson Clevo, 2009. "Environmental and Pro-Social Norms: Evidence on Littering," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-41, April.
    22. Goerke Laszlo & Pannenberg Markus, 2004. "Norm-Based Trade Union Membership: Evidence for Germany," German Economic Review, De Gruyter, vol. 5(4), pages 481-504, December.
    23. Lindbeck, A., 1994. "Welfare State Disincentives with Endogenous Habits and Norms," Papers 589, Stockholm - International Economic Studies.
    24. Tolciu, Andreia, 2009. "What a difference peers can make: The impact of social (work) norms on unemployment duration," HWWI Research Papers 1-24, Hamburg Institute of International Economics (HWWI).
    25. Adrian Chadi, 2010. "How to Distinguish Voluntary from Involuntary Unemployment: On the Relationship between the Willingness to Work and Unemployment‐Induced Unhappiness," Kyklos, Wiley Blackwell, vol. 63(3), pages 317-329, August.
    26. Wang-Sheng Lee & Umut Oguzoglu, 2007. "Income Support and Stigma Effects for Young Australians," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 40(4), pages 369-384, December.
    27. Friedrich Heinemann, 2008. "Is the Welfare State Self‐Destructive? A Study of Government Benefit Morale," Kyklos, Wiley Blackwell, vol. 61(2), pages 237-257, May.
    28. Rainer Winkelmann, 2009. "Unemployment, Social Capital, and Subjective Well-Being," Journal of Happiness Studies, Springer, vol. 10(4), pages 421-430, August.
    29. Gary Chamberlain, 1980. "Analysis of Covariance with Qualitative Data," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 225-238.
    30. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(4), pages 749-775.
    31. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    32. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    33. H. Peyton Young, 2007. "Social Norms," Economics Series Working Papers 307, University of Oxford, Department of Economics.
    34. Bruno S. Frey & Reto Jegen, 2001. "Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
    35. Bruno S. Frey, 2008. "Happiness: A Revolution in Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062771, December.
    36. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
    37. Nick Carroll, 2007. "Unemployment and Psychological Well‐being," The Economic Record, The Economic Society of Australia, vol. 83(262), pages 287-302, September.
    38. Fehr, Ernst & Kirchler, Erich & Weichbold, Andreas & Gächter, Simon, 1998. "When Social Norms Overpower Competition: Gift Exchange in Experimental Labor Markets," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 324-351, April.
    39. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
    40. Kolm, Ann-Sofie, 2005. "Work norms and unemployment," Economics Letters, Elsevier, vol. 88(3), pages 426-431, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wolf, Tobias & Hetschko, Clemens & Schöb, Ronnie, 2016. "Income Support, (Un-)Employment and Well-Being," VfS Annual Conference 2016 (Augsburg): Demographic Change 145860, Verein für Socialpolitik / German Economic Association.
    2. Adrian Chadi & Clemens Hetschko, 2017. "Income or Leisure? On the Hidden Benefits of (Un-)Employment," CESifo Working Paper Series 6567, CESifo.
    3. Adrian Chadi, 2014. "Regional unemployment and norm-induced effects on life satisfaction," Empirical Economics, Springer, vol. 46(3), pages 1111-1141, May.
    4. Ronnie Schöb, 2021. "Labor market policies, unemployment, and identity," IZA World of Labor, Institute of Labor Economics (IZA), pages 270-270, November.
    5. Hetschko, Clemens & Knabe, Andreas & Schöb, Ronnie, 2021. "Happiness, Work, and Identity," GLO Discussion Paper Series 783, Global Labor Organization (GLO).
    6. Jianbo Jeff Luo, 2022. "Is Work a Burden? The Role of the Living Standard," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(1), pages 61-77, August.
    7. Homann, Malte & Jensen, Uwe, 2013. "Does better education cause higher income?," HWWI Research Papers 145, Hamburg Institute of International Economics (HWWI).
    8. Clemens Hetschko, 2016. "On the misery of losing self-employment," Small Business Economics, Springer, vol. 47(2), pages 461-478, August.
    9. Suppa, Nicolai, 2021. "Unemployment and subjective well-being," GLO Discussion Paper Series 760, Global Labor Organization (GLO).
    10. Hetschko, Clemens & Schöb, Ronnie & Wolf, Tobias, 2020. "Income support, employment transitions and well-being," Labour Economics, Elsevier, vol. 66(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Adrian Chadi, 2014. "Regional unemployment and norm-induced effects on life satisfaction," Empirical Economics, Springer, vol. 46(3), pages 1111-1141, May.
    2. Lars Kunze & Nicolai Suppa, 2014. "Bowling Alone or Bowling at All? The Effect of Unemployment on Social Participation," Ruhr Economic Papers 0510, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    3. Kunze, Lars & Suppa, Nicolai, 2017. "Bowling alone or bowling at all? The effect of unemployment on social participation," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 213-235.
    4. Suppa, Nicolai, 2021. "Unemployment and subjective well-being," GLO Discussion Paper Series 760, Global Labor Organization (GLO).
    5. Antje Mertens & Miriam Beblo, 2016. "Self-Reported Satisfaction and the Economic Crisis of 2007–2010: Or How People in the UK and Germany Perceive a Severe Cyclical Downturn," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(2), pages 537-565, January.
    6. repec:zbw:rwirep:0510 is not listed on IDEAS
    7. Tolciu, Andreia, 2008. "Is unemployment a consequence of social interactions? Seeking for a common research framework for economists and other social scientists," HWWI Research Papers 1-15, Hamburg Institute of International Economics (HWWI).
    8. Andreia Tolciu, 2010. "The Economics of Social Interactions: An Interdisciplinary Ground for Social Scientists?," Forum for Social Economics, Taylor & Francis Journals, vol. 39(3), pages 223-242, January.
    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. Andreia Tolciu, 2010. "The Economics of Social Interactions: An Interdisciplinary Ground for Social Scientists?," Forum for Social Economics, Springer;The Association for Social Economics, vol. 39(3), pages 223-242, October.
    11. Thomas Eichner & Daniel Weinreich, 2015. "Welfare stigma and risk taking in the welfare state," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(2), pages 319-348, February.
    12. Clemens Hetschko, 2016. "On the misery of losing self-employment," Small Business Economics, Springer, vol. 47(2), pages 461-478, August.
    13. Dirk Sliwka, 2007. "Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes," American Economic Review, American Economic Association, vol. 97(3), pages 999-1012, June.
    14. Fahr, René, 2006. "The Wage Effects of Social Norms: Evidence of Deviations from Peers’ Body-Mass in Europe," IZA Discussion Papers 2323, Institute of Labor Economics (IZA).
    15. Milena Nikolova & Sinem H. Ayhan, 2019. "Your spouse is fired! How much do you care?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(3), pages 799-844, July.
    16. Hansen, Kerstin F. & Stutzer, Alois, 2022. "Parental unemployment, social insurance and child well-being across countries," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 600-617.
    17. Anastasia Danilov & Dirk Sliwka, 2017. "Can Contracts Signal Social Norms? Experimental Evidence," Management Science, INFORMS, vol. 63(2), pages 459-476, February.
    18. Dos Santos Ferreira, Rodolphe & Lloyd-Braga, Teresa & Modesto, Leonor, 2015. "The destabilizing effects of the social norm to work under a social security system," Mathematical Social Sciences, Elsevier, vol. 76(C), pages 64-72.
    19. Z. Bilgen Susanlı, 2018. "Life satisfaction and unemployment in Turkey: evidence from Life Satisfaction Surveys 2004–2013," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(1), pages 479-499, January.
    20. Anne C. Gielen & Jan C. Ours, 2014. "Unhappiness and Job Finding," Economica, London School of Economics and Political Science, vol. 81(323), pages 544-565, July.
    21. Joan Esteban & Laurence Kranich, 2003. "The Social Contracts with Endogenous Sentiments," Working Papers 71, Barcelona School of Economics.

    More about this item

    Keywords

    Unemployment; Social benefits; Low-wages; Labour market policies; Social norms; Well-being;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. SOEP based publications

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:diw:diwsop:diw_sp353. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/sodiwde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.