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Endogenous social norms - implications for optimal welfare state programs

Dackehag, Margareta LU (2009) In Working Paper
Abstract
This paper investigates the implications of an endogenous social work norm for the optimal welfare state program. Assuming that individual productivity is observable, the analysis finds that restrictions on program participation, implying a larger benefit to a smaller group of recipients, may be welfare improving. However, the effect of the norm is indeterminate. The disutility of non-compliance suggests a higher benefit; the endogeneity of the norm suggests a lower benefit. Assuming that individual productivity is not observable, the analysis finds that the social norm unambiguously contributes to increased program generosity. However, for sufficiently generous policies, the norm contributes to program retrenchment.
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author
organization
publishing date
type
Working Paper
publication status
submitted
subject
keywords
Welfare analysis, Social norm, Welfare state
in
Working Paper
issue
17
publisher
Department of Economics, Lund Universtiy
language
English
LU publication?
yes
id
8ecb6f22-235d-468e-8b0d-4f2cf392135c (old id 1502955)
alternative location
http://swopec.hhs.se/lunewp/abs/lunewp2009_017.htm
date added to LUP
2009-11-17 10:20:09
date last changed
2016-04-16 07:39:13
@misc{8ecb6f22-235d-468e-8b0d-4f2cf392135c,
  abstract     = {This paper investigates the implications of an endogenous social work norm for the optimal welfare state program. Assuming that individual productivity is observable, the analysis finds that restrictions on program participation, implying a larger benefit to a smaller group of recipients, may be welfare improving. However, the effect of the norm is indeterminate. The disutility of non-compliance suggests a higher benefit; the endogeneity of the norm suggests a lower benefit. Assuming that individual productivity is not observable, the analysis finds that the social norm unambiguously contributes to increased program generosity. However, for sufficiently generous policies, the norm contributes to program retrenchment.},
  author       = {Dackehag, Margareta},
  keyword      = {Welfare analysis,Social norm,Welfare state},
  language     = {eng},
  note         = {Working Paper},
  number       = {17},
  publisher    = {Department of Economics, Lund Universtiy},
  series       = {Working Paper},
  title        = {Endogenous social norms - implications for optimal welfare state programs},
  year         = {2009},
}