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Civic Attitudes and the Design of Labor Market Institutions: Which Countries Can Implement the Danish Flexicurity Model?

  • Algan, Yann

    ()

    (Sciences Po, Paris)

  • Cahuc, Pierre

    ()

    (Ecole Polytechnique, Paris)

We argue that the efficiency of the Danish flexicurity Model, which combines high unemployment benefits with low job protection and high participation rate, relies on strong public-spiritedness. We also argue that Continental and Mediterranean European countries are unlikely to be able to implement the Danish Model because the lack of public-spiritedness of their citizens raises moral hazard issues which hinder the implementation of efficient public unemployment insurance.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1928.

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Length: 46 pages
Date of creation: Jan 2006
Date of revision:
Publication status: published as "Civic Virtue and Labor Market Institutions" in: American Economic Journal: Macroeconomics, 2009, 1(1), 111-145
Handle: RePEc:iza:izadps:dp1928
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