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Journal Articles Mathematical Social Sciences Year : 2015

The destabilizing effects of the social norm to work under a social security system

Abstract

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.
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hal-01738170 , version 1 (20-03-2018)

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Rodolphe dos Santos Ferreira, Teresa Lloyd-Braga, Leonor Modesto. The destabilizing effects of the social norm to work under a social security system. Mathematical Social Sciences, 2015, 76, pp.64-72. ⟨10.1016/j.mathsocsci.2015.04.004⟩. ⟨hal-01738170⟩
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