We propose a theory of tolerance where endogenous lifestyles and exogenous traits are invested with symbolic value by people. Value systems chosen by parents for their children affect the esteem enjoyed by individuals in society. Intolerant individuals attach all symbolic value to a small number...

This paper challenges the view that weak work norms make generous welfare states economically unsustainable. I develop a dynamic model of family-transmitted values that has a laissez-faire equilibrium with strong work norms coexisting with a social-insurance equilibrium with weak work norms....