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
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
VL - 76
SP - 64
EP - 72
JO - Mathematical Social Sciences
JF - Mathematical Social Sciences
SN - 0165-4896
ER -
