DP5489 Civic Attitudes and the Design of Labour Market Institutions: Which Countries Can Implement the Danish Flexicurity Model?

Author(s): Yann Algan , Pierre Cahuc

Publication Date: February 2006

Keyword(s): job protection , unemployment benefits , civic attitudes

JEL(s): J23 , J65 , J68

Programme Areas: Labour Economics

Link to this Page: www.cepr.org/pubs/dps/DP5489.asp

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.