Civic Attitudes and the Design of Labor Market Institutions: Which Countries Can Implement the Danish Flexicurity Model?

Algan, Yann; Cahuc, Pierre

doi:10.2139/ssrn.878337

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Civic Attitudes and the Design of Labor Market Institutions: Which Countries Can Implement the Danish Flexicurity Model?

IZA Discussion Paper No. 1928

46 Pages Posted: 26 Jan 2006

See all articles by Yann Algan

Yann Algan

Universite Paris I Pantheon-Sorbonne - CNRS-EUREQUA; IZA Institute of Labor Economics

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE); Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA); University of Angers - French National Center for Scientific Research (CNRS); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Date Written: January 2006

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: job protection, unemployment benefits, civic attitudes

JEL Classification: J23, J65, J68

Suggested Citation: Suggested Citation

Algan, Yann and Cahuc, Pierre, Civic Attitudes and the Design of Labor Market Institutions: Which Countries Can Implement the Danish Flexicurity Model? (January 2006). IZA Discussion Paper No. 1928, Available at SSRN: https://ssrn.com/abstract=878337 or http://dx.doi.org/10.2139/ssrn.878337