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dc.contributor.authorCervellati, Matteo-
dc.contributor.authorEsteban, Joan-
dc.contributor.authorKranich, Laurence-
dc.date.accessioned2007-10-30T13:06:10Z-
dc.date.available2007-10-30T13:06:10Z-
dc.date.issued2007-03-01-
dc.identifier.urihttp://hdl.handle.net/10261/1696-
dc.description.abstractMoral values influence individual behavior and social interactions. A specially significant instance is the case of moral values concerning work effort. Individuals determine what they take to be proper behaviour and judge the others, and themselves, accordingly. They increase their esteem -and self-esteem- for those who perform in excess of the standard and decrease their esteem for those who work less. These changes in self-esteem result from the self-regulatory emotions of guilt or pride extensively studied in Social Psychology. We examine the interactions between sentiments, individual behaviour and the social contract in a model of rational voting over redistribution where individual self-esteem and relative esteem for others are endogenously determined. Individuals differ in their productivities. The desired extent of redistribution depends both on individual income and on individual attitudes toward others. We characterize the politico-economic equilibria in which sentiments, labor supply and redistribution are simultaneously determined. The model has two types of equilibria. In "cohesive" equilibria, all individuals conform to the standard of proper behaviour, income inequality is low and social esteem is not biased toward any particular type. Under these conditions equilibrium redistribution increases in response to larger inequality. In a "clustered" equilibrium skilled workers work above the mean while unskilled workers work below. In such an equilibrium, income inequality is large and sentiments are biased in favor of the industrious. As inequality increases, this bias may eventually overtake the egoistic demand for greater taxation and equilibrium redistribution decreases. The type of equilibrium that emerges crucially depends on inequality. We contrast the predictions of the model with data on inequality, redistribution, work values and attitudes toward work and toward the poor for a set of OECD countries.en_US
dc.description.sponsorshipFinancial support from the Polarization and Conflict Project CIT-2-CT-2004-506084 funded by the European Commission-DG Research Sixth Framework Programme, Barcelona Economics (CREA), CICYT grant no. SEJ2006-00369, and the Instituto de Estudios Fiscales are gratefully acknowledged.en_US
dc.language.isoengen_US
dc.relation.ispartofseriesUFAE and IAE Working Papersen_US
dc.relation.ispartofseries702.07en_US
dc.rightsopenAccessen_US
dc.subjectSocial Contracten_US
dc.subjectEndogenous Sentimentsen_US
dc.subjectVoting over Taxesen_US
dc.subjectMoral Worken_US
dc.titleThe Social Contract with Endogenous Sentimentsen_US
dc.typeDocumento de trabajoen_US
Appears in Collections:(IAE) Informes y documentos de trabajo
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