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Social Insurance Networks

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  • Markussen, Simen

    () (Ragnar Frisch Centre for Economic Research)

  • Røed, Knut

    () (Ragnar Frisch Centre for Economic Research)

Abstract

Based on administrative panel data from Norway, we examine how social insurance dependency spreads within neighborhoods, families, ethnic minorities, and among former schoolmates. We use a fixed effects methodology that accounts for endogenous group formation, contextual interactions, and time-constant as well as time-varying confounders. We report evidence that social insurance dependency is contagious. The estimated network effects are both quantitatively and statistically significant, and they rise rapidly with "relational closeness" in a way that establishes endogenous social interaction as a central causal mechanism. Social interactions do not cross ethnic borders.

Suggested Citation

  • Markussen, Simen & Røed, Knut, 2012. "Social Insurance Networks," IZA Discussion Papers 6446, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6446
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    Cited by:

    1. Markussen, Simen & Røed, Knut, 2017. "Egalitarianism under Pressure: Toward Lower Economic Mobility in the Knowledge Economy?," IZA Discussion Papers 10664, Institute for the Study of Labor (IZA).
    2. Rieck, Karsten Marshall Elseth & Vaage, Kjell, 2012. "Social Interactions At The Workplace: Exploring Sickness Absence Behavior," Working Papers in Economics 11/12, University of Bergen, Department of Economics.
    3. Mittag, Nikolas, 2016. "A Simple Method to Estimate Large Fixed Effects Models Applied to Wage Determinants and Matching," IZA Discussion Papers 10447, Institute for the Study of Labor (IZA).
    4. Markussen, Simen & Røed, Knut, 2017. "The gender gap in entrepreneurship – The role of peer effects," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 356-373.
    5. Gerald J. Pruckner & Thomas Schober & Katrin Zocher, 2017. "The company you keep - Health behavior among work peers," Economics working papers 2017-07, Department of Economics, Johannes Kepler University Linz, Austria.
    6. Markussen, Simen & Røed, Knut, 2016. "Gendered Entrepreneurship Networks," IZA Discussion Papers 9984, Institute for the Study of Labor (IZA).
    7. Gaure, Simen, 2013. "OLS with multiple high dimensional category variables," Computational Statistics & Data Analysis, Elsevier, vol. 66(C), pages 8-18.

    More about this item

    Keywords

    peer effects; social interaction; social multiplier; work norms;

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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