Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 478: A Note on Social Norms and Transfers

David Sundén and Jörgen W. Weibull
Additional contact information
David Sundén: Research Institute of Industrial Economics (IFN)
Jörgen W. Weibull: Research Institute of Industrial Economics (IFN)

Abstract: This note elaborates an extension of the paper "Social Norms, the Welfare State, and Voting" by Lindbeck, Nyberg, and Weibull [1]. That paper studies the effects of a social norm against living off others work. In the welfare-state context of their model, this means that individuals who live on public transfers experience disutility. One limitation in the model is that the individual's choice is binary: either to work full time or not at all. Here we allow individuals to choose working hours on a continuous scale. We derive a fixed-point equation that determines all individuals number of work hours, and show that the limitation to a binary choice is not binding if individuals have Cobb-Douglas preferences and no non-labor incomes.

Keywords: Sociology; Labour Market

JEL-codes: A14

7 pages, May 1997

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