Discussion paper

DP7838 Social Insurance, Education, and Work Ethics

This research shows that moral hazard associated with extant social insurance arrangements causes underinvestment in human capital, because of government?s inability to commit to welfare policies. It then argues that education policies, such as education subsidies or direct public investment in education, may achieve a second best and also help alleviating the deterioration of work norms.


Gradstein, M (2010), ‘DP7838 Social Insurance, Education, and Work Ethics‘, CEPR Discussion Paper No. 7838. CEPR Press, Paris & London. https://cepr.org/publications/dp7838