This paper explores the capability of the state to affect the individual's decision to work for free. For this purpose we combine individual-level data from the European and World Values Survey with macroeconomic and political variables for OECD member countries. Empirically we identify three...

The paper presents a tractable general equilibrium model of search unemployment that incorporates absence from work as a distinct labor force state. Absenteeism is driven by random shocks to the value of leisure that are private information to the workers. Firms offer wages, and possibly sick...

This paper looks at welfare reforms in Italy and their effects on labour supply. I focus on social security reforms, which have taken place in the 1990s and on labour market reforms. Old age social security expenditure in Italy is high (14% of GDP) and the system has been very generous on early...

Comparing Sweden to other EU countries, labour force participation rates of older individuals and females are high. These facts are consistent with the idea that institutional design matters: access to child care, paid parental leave, and a tax system with individual rather than household income...

Previous research suggests that there are substantial interactions between the unemployment insurance (UI) and the sickness insurance (SI) in Sweden. Moral hazard arises in the interplay between these two social insurance systems, since by reporting sick an unemployed person can postpone the UI...

In this paper we give an overview of labour supply incentives present in the Estonian income support system and how changes during the last ten years in the Estonian benefit system have influenced the incentives. As Estonia belongs to the group of EU countries where both taxes and social...

This paper reviews how income-support systems affect labour force participation in the UK. The UK's approach to social insurance is basic security, with modest, typically flat-rate, benefits; insurance-based benefits are relatively unimportant. Compared with the EU, the UK has high employment...

We analyze the effect of the projected demographic transition on the political support for social security, and equilibrium outcomes. Embedding a probabilistic-voting setup of electoral competition in the Diamond (1965) OLG model, we find that intergenerational transfers arise in the absence of...

While the health risks associated with smoking are well known, the impact on income distributions is not. This paper extends the literature by examining the distributional effects of a behavioral choice, in this case smoking, on net marginal Social Security tax rates (NMSSTR). The results show...

This paper looks at a specific type of moral hazard that arises in the interplay between two large public insurance systems in Sweden, namely the sickness insurance (SI) and the unemployment insurance (UI). Moral hazard can arise from the benefit size structure as for some unemployed persons,...