Civic Vitue and Labor Market Institutions

Abstract : We argue civic virtue plays as a key role in explaining the design of public insurance against unemployment risks by solving moral hazard issues wich hinder the efficiency of unemployement insurance. We show, in a simple model, that economies with stronger civic virtues are more prone to provide insurance through unemployment benefits rather than though job protection. We provide cross-country and the design of unemployment benefits and employment protection in OECD countries over the period 1980 to 2003. We then use an epidemiological approach to estimate the existence of a potential causal relationship from inherited civic virtue to labor market insurance instituion.
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Submitted on : Friday, April 12, 2013 - 9:42:40 PM
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Yann Algan, Pierre Cahuc. Civic Vitue and Labor Market Institutions. American Economic Journal: Macroeconomics, American Economic Association, 2009, 1 (1), pp.111-145. ⟨10.1257/mac.1.1.111⟩. ⟨hal-00812847⟩

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