UNEMPLOYMENT INSURANCE AND CULTURAL TRANSMISSION: THEORY AND APPLICATION TO EUROPEAN UNEMPLOYMENT. Issue 6 (December 2013)

• Record Type: Journal Article
• Authors: Michau, Jean‐Baptiste
• Is Part Of: Journal of the European Economic Association. Volume 11:Issue 6(2013:Dec.)
• Page Start: 1320
• Page End: 1347
• Publication Date: 2013-12
• Subjects: Economics -- Periodicals; Économie politique -- Périodiques; Science économique; Périodique électronique (Descripteur de forme); Ressource Internet (Descripteur de forme); 330
• DOI: 10.1111/jeea.12065
• Languages: English
• ISSNs: 1542-4766

Abstract

<abstract abstract-type="main"> <title>Abstract</title> <p>This paper emphasizes the two‐way causality between the provision of unemployment insurance and the cultural transmission of civicness. The returns to being uncivic are increasing in the generosity of unemployment insurance; but this generosity is decreasing in the number of uncivic individuals. In this context, I determine the evolution of preferences across generations and show that cultural heterogeneity is sustained over the long‐run. The dynamics of cultural transmission can generate a long lag between the introduction of unemployment insurance and an increase in people's willingness to live off government‐provided benefits. Hence, it offers an explanation to the 'European unemployment puzzle' due to the coexistence of generous unemployment insurance and low unemployment in the 1950s and 1960s.</p> </abstract>