Scandinavian Working Papers in Economics
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Research Institute of Industrial Economics (IFN) Working Paper Series

No 585:
Social Norms and Welfare State Dynamics

Assar Lindbeck (), Sten Nyberg () and Jörgen W. Weibull ()

Abstract: The paper analyses the interaction between economic incentives and work norms in the context of social insurance. If the work norm is endogenous in the sense that it is weaker when the population share of beneficiaries is higher, then voters will choose less generous benefits than otherwise. We also discuss welfare-state dynamics when there is a time lag in the adjustment of the norm in response to changes in this population share, and show how a temporary shift in the unemployment rate may cause persistence in the number of beneficiaries.

Keywords: Welfare State; Social Norms; Social Insurance; (follow links to similar papers)

JEL-Codes: D19; D64; H31; Z13; (follow links to similar papers)

14 pages, November 15, 2002

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This paper is published as:
Lindbeck, Assar, Sten Nyberg and Jörgen W. Weibull, (2003), 'Social Norms and Welfare State Dynamics', Journal of the European Economic Association 1, Papers and Proceedings, pages 533-542

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