Working Paper: CEPR ID: DP5489
Authors: Yann Algan; Pierre Cahuc
Abstract: We argue that the efficiency of the Danish flexicurity Model, which combines high unemployment benefits with low job protection and high participation rate, relies on strong public-spiritedness. We also argue that Continental and Mediterranean European countries are unlikely to be able to implement the Danish Model because the lack of public-spiritedness of their citizens raises moral hazard issues which hinder the implementation of efficient public unemployment insurance.
Keywords: civic attitudes; job protection; unemployment benefits
JEL Codes: J23; J65; J68
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Civic attitudes (D64) | Labor market institutions (J08) |
| Civic attitudes (D64) | Unemployment benefits (J65) |
| Civic attitudes (D64) | Job protection (J68) |
| Public-spiritedness (D64) | Moral hazard issues (G52) |
| Civic attitudes (D64) | Unemployment rates (when benefits are generous) (J64) |
| Job offers scarcity (J23) | Unemployment rates (J64) |
| Civic attitudes (D64) | Employment protection (J68) |