Social Insurance Networks

43 Pages Posted: 14 Apr 2012

See all articles by Simen Markussen

Simen Markussen

University of Oslo - Ragnar Frisch Centre for Economic Research

Knut Roed

Ragnar Frisch Centre for Economic Research; IZA Institute of Labor Economics

Abstract

Based on administrative panel data from Norway, we examine how social insurance dependency spreads within neighborhoods, families, ethnic minorities, and among former schoolmates. We use a fixed effects methodology that accounts for endogenous group formation, contextual interactions, and time-constant as well as time-varying confounders. We report evidence that social insurance dependency is contagious. The estimated network effects are both quantitatively and statistically significant, and they rise rapidly with "relational closeness" in a way that establishes endogenous social interaction as a central causal mechanism. Social interactions do not cross ethnic borders.

Keywords: social interaction, social multiplier, work norms, peer effects

JEL Classification: C31, H55, I38

Suggested Citation

Markussen, Simen and Røed, Knut, Social Insurance Networks. IZA Discussion Paper No. 6446, Available at SSRN: https://ssrn.com/abstract=2039572

Simen Markussen (Contact Author)

University of Oslo - Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0317 Oslo
Norway

Knut Røed

Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0349 Oslo
Norway

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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