Work norms, social insurance and the allocation of talent

Giacomo Corneo

No 2013/12, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: This paper challanges the view that weak work norms in generous welfare states makes them economically unsustainable. I develop a dynamic model of family-transmitted values that has a laissez-faire equilibrium with strong work norms coexisting with a social-insurance equilibrium with weak work norms. While the former has better incentives, the latter induces more intergenerational occupational mobility which improves the allocation of talent and fuels growth. Strong work norms arise as a defensive strategy of parents that aims at perpetuating their occupation along family lines. I present evidence from microdata showing that generous social insurance correlates with high intergenerational occupational mobility and that more mobile individuals endorse weaker work norms.

Keywords: work norms; unemployment insurance; occupational mobility; economic growth. (search for similar items in EconPapers)
JEL-codes: H2 O0 Z1 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-hrm and nep-ias
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Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Work norms, social insurance and the allocation of talent (2013)
Working Paper: Work Norms, Social Insurance and the Allocation of Talent (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:201312

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