Work Values, Endogenous Sentiments and Redistribution

Matteo Cervellati, Laurence Kranich () and Joan Esteban ()

No 434, Working Papers from Barcelona School of Economics

Abstract: We examine the interactions between individual behavior, sentiments and the social contract in a model of rational voting over redistribution. Agents have moral "work values". Individuals' self-esteem and social consideration of others are endogenously determined comparing behaviors to moral standards. Attitudes toward redistribution depend on self-interest and social preferences. We characterize the politico-economic equilibria in which sentiments, labor supply and redistribution are determined simultaneously. The equilibria feature different degrees of "social cohesion" and redistribution depending on pre-tax income inequality. In clustered equilibria the poor are held partly responsible for their low income since they work less than the moral standard and hence redistribution is low. The paper proposes a novel explanation for the emergence of different sentiments and social contracts across countries. The predictions appear broadly in line with well-documented differences between the United States and Europe.

Keywords: social contract; Endogenous Sentiments; Voting over Taxes; moral work values (search for similar items in EconPapers)
JEL-codes: D64 D72 H3 J2 Z13 (search for similar items in EconPapers)
Date: 2015-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Related works:
Working Paper: Work Values, Endogenous Sentiments and Redistribution (2010)
Working Paper: Work Values, Endogenous Sentiments and Redistribution (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:434

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