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Social Norms and Economic Incentives in the Welfare State

  • Lindbeck, Assar

    ()

    (Research Institute of Industrial Economics (IFN))

  • Nyberg, Sten

    (Research Institute of Industrial Economics (IFN))

  • Weibull, Jörgen W.

    (Research Institute of Industrial Economics (IFN))

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 fraction 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 model highlights certain factors determining the size of the welfare state.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 476.

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Length: 27 pages
Date of creation: May 1997
Date of revision:
Handle: RePEc:hhs:iuiwop:0476
Contact details of provider: Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
Web page: http://www.ifn.se/
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  1. Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, vol. 8(3), pages 329-340, December.
  2. Sundén, David & Weibull, Jörgen W., 1997. "A Note on Social Norms and Transfers," Working Paper Series 478, Research Institute of Industrial Economics.
  3. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
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