IZA DP No. 300: The Role of Social Work Norms in Job Searching and Subjective Well-Being
published in: Journal of the European Economic Association, 2004, 2 (4), 696-719
Social norms are usually neglected in economics because they are to a large extent enforced through non-market interactions and difficult to isolate empirically. In this paper, we offer a direct measure of the social norm to live off one’s own income and we show that this norm has important economic effects. The stronger the norm, the more quickly unemployed people find a new job. This behavior can be explained by utility differences, probably due to social pressure. Unemployed people are significantly less happy than employed people and their reduction in life satisfaction is the larger, the stronger the norm is.