Social Insurance, Work Norms, and the Allocation of Talent

In countries where social insurance is generous, individuals endorse relatively weak work norms; however, weaker work norms are not associated with worse economic performance, neither at the country level nor at the individual level. I develop a model of endogenous work norms that rationalizes that evidence. Weak work norms do not harm labor productivity because they improve the allocation of individual talents to occupations, while strong work norms arise as a defensive strategy of parents aiming at perpetueting their occupation along family lines. Evidence from microdata corroborates the view that social insurance favors intergenerational occupational mobility and that more mobile individuals endorse weaker work norms. Keywords: social insurance, work norms, symbolic values, occupational mobility, economic growth. JEL-Classi…cation: O0, Z1.