American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Civic Virtue and Labor Market Institutions
American Economic Journal: Macroeconomics
vol. 1,
no. 1, January 2009
(pp. 111–45)
Abstract
We argue civic virtue plays a key role in explaining the design of public insurance against unemployment risks by solving moral hazard issues which hinder the efficiency of unemployment insurance. We show, in a simple model, that economies with stronger civic virtues are more prone to provide insurance through unemployment benefits rather than through job protection. We provide cross-country empirical evidence of a strong correlation between civic attitudes 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 institutions. (JEL: J41, J65, J68, Z13)Citation
Algan, Yann, and Pierre Cahuc. 2009. "Civic Virtue and Labor Market Institutions." American Economic Journal: Macroeconomics, 1 (1): 111–45. DOI: 10.1257/mac.1.1.111Additional Materials
JEL Classification
- J41 Labor Contracts
- J65 Unemployment Insurance; Severance Pay; Plant Closings
- J68 Mobility, Unemployment, and Vacancies: Public Policy
- Z13 Economic Sociology; Economic Anthropology
There are no comments for this article.
Login to Comment