Welfare state disincentives with endogenous habits and norms

Article Abstract:

Habits and norms are considered as constraints in affecting economic disincentives on individual behavior. However, these constraints may also be affected by the very same disincentives. An individual is assumed to obey these habits if the majority of society also do so. Major macroeconomic shocks could dramatically speed up the process even if these constraints on economic behavior recede slowly with changes in economic incentives.

Economic aspects, Social norms, Habit, Habits (Human behavior)

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A theory of the welfare state

Article Abstract:

The welfare state ensures a lifetime career, increases risk-taking and experiences the effects of moral hazards. The trade-off between average income and inequality is considered by studying redistributive equilibria from an allocative aspect. The issue of optimal redistributive taxation with tax-induced risk is studied. It is demonstrated that constant returns to risk taking lead to more redistribution in more post-tax inequality.

Risk-taking (Psychology), Risk taking

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Comment on B. Holmlund, "Unemployment Insurance in Theory and Practice."

Article Abstract:

Microeconometric and macroeconometric outcome do not provide strong and assuring support to expectations of a positive relationship between unemployment and unemployment benefits as suggested in microeconomic and macroeconomic theory. Furthermore, there is no evidence for the strong beliefs, claimed by several economists and others, of a powerful positive relationship between unemployment advantages and period of unemployment.

Economics, Research and Development in the Social Sciences and Humanities, Unemployment Insurance, Administration of Human Resource Programs (except Education, Public Health, and Veterans' Affairs Programs), Microeconomics

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