This note elaborates an extension of the paper "Social Norms, the Welfare State, and Voting" by Lindbeck, Nyberg, and Weibull [1]. That paper studies the effects of a social norm against living off others work. In the welfare-state context of their model, this means that individuals who live on public transfers experience disutility. One limitation in the model is that the individual's choice is binary: either to work full time or not at all. Here we allow individuals to choose working hours on a continuous scale. We derive a fixed-point equation that determines all individuals number of work hours, and show that the limitation to a binary choice is not binding if individuals have Cobb-Douglas preferences and no non-labor incomes.
Working Paper No. 478
A Note on Social Norms and Transfers
Working Paper
Reference
Sundén, David and Jörgen W. Weibull (1997). “A Note on Social Norms and Transfers”. IFN Working Paper No. 478. Stockholm: Research Institute of Industrial Economics (IFN).
Sundén, David and Jörgen W. Weibull (1997). “A Note on Social Norms and Transfers”. IFN Working Paper No. 478. Stockholm: Research Institute of Industrial Economics (IFN).
Authors
David Sundén, Jörgen W. Weibull