Welfare regimes and the incentives to work and get educated

Andrés Rodríguez-Pose and Vassilis Tselios

No 2011-01, Working Papers from Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales

Abstract: This paper examines whether differences in welfare regimes shape the incentives to work and get educated. Using microeconomic data for more than 100,000 European individuals, the results show that welfare regimes make a difference for wages and education. First, people- and household-based effects (internal returns to education and household wage and education externalities) generate socioeconomic incentives for people to get an education and work, which are stronger in countries with the weakest welfare systems, i.e. those with what is known as 'Residual' welfare regimes (Greece, Italy, Spain and Portugal). Second, place-based effects, and more specifically differences in regional wage per capita and educational endowment and in regional interpersonal income and educational inequality, also influence wages and education in different ways across welfare regimes. Place-based effects have the greatest incidence in the Nordic Social-Democratic welfare systems. These results are robust to the inclusion of a large number of people- and place-based controls.

Keywords: education; employment; wages; welfare; regions; European Union (search for similar items in EconPapers)
JEL-codes: H53 H75 I31 I38 J38 (search for similar items in EconPapers)
Date: 2011-01-05
New Economics Papers: this item is included in nep-edu, nep-eur, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Environment and Planning A 44(1), January 2012: 125-149

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Related works:
Journal Article: Welfare Regimes and the Incentives to Work and Get Educated (2012)
Working Paper: Welfare regimes and the incentives to work and get educated (2011)
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