Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259976 
Year of Publication: 
2009
Series/Report no.: 
Working Paper No. 2009:17
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
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.
Subjects: 
Welfare state
Social norm
Welfare analysis
JEL: 
H11
H23
H53
I38
Document Type: 
Working Paper

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