Institutions of Flexicurity in Labor Markets: Culture Against Incentives
Abstract: Flexicurity type of labor market institutions (low employment protection together with high replacement rate of previous wage by unemployment benefit) are now being proposed as a balanced and efficient combination to solve employment problems. The question however arises of whether the cultural features of some countries (tendency to abuse benefits) risk undermining its efficiency. The objective of this paper is to explain to what degree searching or not searching for a job depends on labor market institutions, and how much on the values and attitudes of the person unemployed. It will be shown that flexicurity institutions play an important role, while a personal sense of fairness is among other personal features (as well as age, passivity and experience of previous periods of unemployment) that modify the decision to search for a job.
