Abstract
Many European countries still provide their citizens with social insurance programs of unprecedented generosity. A cultural critique of the welfare state contends that generous social insurance has detrimental effects on work norms. This article revisits the model of endogenous work ethic developed by Lindbeck and Nyberg and explores survey evidence on the relationship between social spending and pro-work attitudes. Both theoretical and empirical support of the cultural critique to the welfare state are found to be fragile. Furthermore, the empirical relationship between individual work ethic and individual income is shown to be non-monotonic, suggesting that weaker work norms needs not harm economic performance. (JEL code: H2) Copyright The Author 2012. Published by Oxford University Press on behalf of Ifo Institute, Munich. All rights reserved. For permissions, please email: journals.permissions@oup.com, Oxford University Press.
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