TY - JOUR
T1 - The destabilizing effects of the social norm to work under a social security system
AU - Ferreira, Rodolphe dos Santos
AU - Lloyd-Braga, Teresa
AU - Modesto, Leonor
N1 - Funding Information:
Financial support from FCT under the PTDC/EGE-ECO/103468/2008 is gratefully acknowledged. We thank participants of annual conferences SAET 2013, held at MINES ParisTech, and PET 2013, held in Católica Lisbon, for useful comments. We also thank two referees for precious suggestions.
Publisher Copyright:
© 2015.
PY - 2015/7/1
Y1 - 2015/7/1
N2 - We study employment dynamics in an OLG model with unemployment benefits financed by taxing wages, and with a defined contribution plan. The novelty with respect to recent studies of the effects of social security in this context is that we introduce a social norm to work, shaping the worker's participation decision, and hence affecting the reservation wage. We find that a strong social norm to work destabilizes conventional wisdom by reversing the negative effects of social security on employment, and destabilizes the economy by facilitating the emergence of endogenous fluctuations.
AB - We study employment dynamics in an OLG model with unemployment benefits financed by taxing wages, and with a defined contribution plan. The novelty with respect to recent studies of the effects of social security in this context is that we introduce a social norm to work, shaping the worker's participation decision, and hence affecting the reservation wage. We find that a strong social norm to work destabilizes conventional wisdom by reversing the negative effects of social security on employment, and destabilizes the economy by facilitating the emergence of endogenous fluctuations.
UR - http://www.scopus.com/inward/record.url?scp=84929191611&partnerID=8YFLogxK
U2 - 10.1016/j.mathsocsci.2015.04.004
DO - 10.1016/j.mathsocsci.2015.04.004
M3 - Article
AN - SCOPUS:84929191611
SN - 0165-4896
VL - 76
SP - 64
EP - 72
JO - Mathematical Social Sciences
JF - Mathematical Social Sciences
ER -
