 Economic Crisis and MoraleNo 09-046.RS, Working Papers CEB from ULB -- Universite Libre de Bruxelles Abstract: The functioning of welfare states and tax systems is fostered by social norms to obey the rules of the system. Morale can change and react to new incentives. In particular, a deep economic crisis with increasing unemployment and reduced prospects for market income may have a norm eroding effect. This study explores the link between economic crisis and morale. Our theoretical reasoning is based on an economic approach to the evolution of norms, according to which norms are influenced by self-interest. A distinction is made between two dimensions of citizens’ morale: benefit and tax morale. Our econometric evidence based on data from the World Value Survey suggests that a sharp hike in unemployment reduces the morale standards along both dimensions. The crisis impact on benefit morale is conditional on the existence of generous benefit schemes. Keywords: Social norms; tax morale; benefit morale (search for similar items in EconPapers) Published by: Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sol:wpaper:09-046 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in Working Papers CEB from ULB -- Universite Libre de Bruxelles Contact information at EDIRC. |
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