Worker Identity, Employment Fluctuations and Stabilization Policy

Arbeitspapier

This paper provides a model of social hysteresis whereby long, deep recessions demotivate workers and thereby lead them to change their work ethic. In switching from a pro-work to an anti-work identity, their incentives to seek and retain work fall and consequently their employment chances fall. In this way, temporary recessions may come to have permanent effects on aggregate employment. We also show that these permanent effects, along with the underlying identity switches, can be avoided through stabilization policy. The size of the government expenditure multiplier can be shown to depend on the composition of identities in the workforce.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 7413

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General ; Labor Force and Employment, Size, and Structure ; Safety; Job Satisfaction; Related Public Policy
• Subject: economics of identity ; work ethic ; hysteresis ; business cycle policy ; Arbeitslosigkeit ; Arbeitsethik ; Hysteresis ; Konjunktur ; Beschäftigungsfähigkeit ; Konjunkturpolitik ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Snower, Dennis J. ; Lechthaler, Wolfgang
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/80629
• Last update: 10.03.2025, 11:45 AM CET