here and today what is we're going to talk about he's going to talk about flexi purity so he's going to illustrate this concept i'm not going to do the same but i would like to introduce professor pierre cope he's an expert on labor market he's internationally recognized for his competencies he works in paris at this one university where he teaches microeconomics and labor economics he works with many centers which are active in the field of labor markets such as the bonn institute the center for economics and statistics in paris and the london center as well uh first of all what does flex security mean it means trying to put together policies which on one side consider social security for workers and on the other employers need in particular employers needs for flexibility and this may be interpreted in several ways and professor karyuk will talk about this where does this idea come from from denmark in the late 90s a new model of labor market policies was established including these two components so the danish example is a sort of lab for labor policies but what can we do in italy we know there's a very important discussion on the reform of the labor market connected of course to the brd law and i think now it's time to take a step forward in this discussion and one of the important questions is can the flex security model be adopted in italy how can it be modified or adjusted to be implemented in italy well now it's time to give the floor to professor karyuk who is going to tell us about the flex security model thank you okay thank you roberto for this nice introduction and uh thank you also for uh people in toronto to invite me i didn't know to enter before it's very nice city and it's especially exciting to be here in this beautiful festival i've been here all yesterday and i went to some conferences i was really very impressed by first people who are presenting papers and ids are very well known people and there are many well-known italian people around the world while here and also people from abroad and i was i am really also very impressed by i'm impressed by you the assistants you raise very very very good questions and uh i'm quite uh excited to to have your questions after my speech so please do not hesitate to raise questions and if you see me if you if you feel frustrated by what i say if you don't like please tell me it's very important for us to try to uh see whether the id that we push uh seem uh sensible to uh to people makes sense for people and i will present you some uh some some work that we are actually currently doing with jane algon who is a a professor in in paris and uh for sometimes we have been uh tried trying to think of the links between culture and economic performance because it turns out that many countries have very very different economic performance especially in the labour market and these differences in performances are very persistent and at one point we can think that if it is so much persistent it could be because people are really different they don't think in the same way they perhaps do not want the same outcome and this is a way of research uh that we we we we we begin to we began to do some some years ago and that we push you uh in different dimensions and the dimensions i want to speak uh about today is about uh the link between spirits between civic spirit or civic virtue and the organization of the labor market and to to begin uh to to do with it on this issue i'd like to describe you our point of departure on the uh on the labor markets what are the important facts on the labor markets that we are today that we have to deal with if we want to think of the institution that we should have on the labor market i think that one very important fact that not anyone is aware of is that on labour markets you have huge process of job creation and job destruction in a typical oecd countries you have about 15 percent of jobs that are destroyed every every year so if you think of the of italy where you have about 13 million people working in the private sector it makes about uh uh 19 um about two two million people uh so sorry two million uh jobs destroyed every year it makes about uh nine uh thousand jobs destroyed every day every open day uh so it's really it is really a very big amount but obviously these jobs that are destroyed uh they are destroyed somewhere and uh in another firm there are jobs that are also created that is not the end of work if you just look at the job destruction side you could think that it is the end of work because you see that there are so many jobs that are destroyed but up hopefully there are also many jobs that are created and this is a very important process on the labor market and if you look at the uh at the manpower uh the process of of mobile of mobility is even more more important because uh on the same job you can have some people some different people uh who will go uh one after the other on the on the subject on the same german the same firm so if you look a firm with one employees on average there are 40 entries in the typical oecd countries in this firm and 40 exits every year so because on the same job you can have some people who come in and then we will go out for many different reasons and these numbers are even bigger in service and in service industries and they are lower in manufacturing industries but on average you have these very big numbers and what is important to to to understand is that this process of relocation is associated with productivity gains which means that employment is uh implemented growth is higher in firms with higher productivity growth that is to say that these are firms with low productivity that lose job and that is firms with high productivity that creates subs so from this point of view this process of job allocation is very important to understand to to to create growth if there were no this process of job allocation we would not have such such growth and uh obviously this kind of thing has been understood a long time ago especially it has been this kind of idea has been pushed okay sorry this kind of idea has been pushed by joseph schumpeter in a book published in in 42 which is a very nice book where he describes this process of creative destruction and but at that time we didn't have the data to to see that this process was so big so so so so huge and now uh we have the data we got them not such a long time ago we got them something like in the end of the 80s and now we really know that this process is very important and we have that we have to deal with it if we want to have economy with uh high growth with high rate of growth of gdp and obviously the pitfall of this uh of this um of this of this process is that workers first face important risk obviously if you have this process of job creation and job destruction when you have a job you know that on average you are not going to keep this job for all your life and that you could become unemployed and so i think that today in modern economies the the challenge for a modern social security system is to provide uh job security without preventing job mobility job relocation because we know that job relocation is very important to create growth if there is no job required reallocation the rate of growth is very small because a large part of the growth of of the gdp is explained by this uh this job this gebro location and um that is i think uh the uh the why the flexi flexibility model is so fascinating for many european countries and actually this model was adapted in nordic countries as roberto said before and the typical economy that has this flex security model is denmark and we know that denmark has very good uh economic performance on the labor market the unemployment rate is very high is uh it is about 75 percent the unemployment rate is low about 4 percent and also what is very important is that in this country the people are very happy about their job they don't feel insecure they don't they do not worry to lose their job even if the turnover is is high is as high highs in other countries and how is this system implemented the system is implemented with a combination of two things first high unemployment benefits in the in in the uh in denmark the replacement rate is about 90 percent which means that people who get unemployed can get for low wage workers a wage that is equal to 90 percent of their previous wage during four years and this is a very high replacement ratio and also what is going on is that there is a very efficient public employment services when workers do their job they are really helped and they also have to to to really to look for a job and they are very active labor very actively labor market policies which mean that the public employment services also provides trainings and also also the unemployed workers have the obligation to go to training if they don't find a job or otherwise they could they could lose their unemployment benefits and at the counterpart of these high unemployment benefits and of these efficient public employment services there is very low job protection which means that labor contracts are very flexible it is very easy to for work for employers to fire workers for economic reasons obviously you cannot fire workers if you want to discriminate between a man and a woman or people with different ethnicity but uh as far as as a firm fire worker for economic reasons when we cannot prove that it is for discrimination then it is easy for firms to fire workers and i think that the the main idea of this system is is a view on unemployment which is very f different from the view that we have in many uh continental and uh southern european countries it the the basic idea is that unemployment is useful is useful to some extent unemployment is to be unemployed and to look for a job is uh something that it is socially use useful because when you look for a job you are going to look to to get a job and then to pay taxes and when you go from one job to another through unemployment then you improve the average productivity in the economy because usually you go from low productivity jobs to high productivity job so this is this idea that being unemployed is not uh is he is not it's not a drama to be unemployed it is it is it can be uh socially useful uh it has to be socially useful and uh departing from this id then you can implement a system that is very different than the system that we have in many southern europe uh european countries and uh so this idea actually uh you could think that we just interpret what is going on but if you see at what mr close frederickson who was a minister of employment in denmark claimed it was at the occasion of a conference on flight security you can find this this speech on the web so it says following to french people who were there the danish flag security model has been proclaimed to be the panacea u.s that will solve all the problems of the french labour markets and there are many good reasons why the french are looking to denmark for inspirations denmark is among the european countries with the highest employment rates and the lowest unemployment rates danish employees are in the forefront internationally when it comes to how they see their job security and denmark is also in the top class as regards job satisfaction so these people are very happy of this system and actually they recommend to to french people to add up the dislike security system this flex security model and also the european commission has really recommended for years to recommend this flex security system to many european countries and unfortunately i would say that this kind of remark also applies to france but it also obviously applies to italy and to many european countries and as we will see now because if you see uh very roughly how the system of job protection and employment benefits organized in european countries you can only see that there is a trade-off between countries with high job protection and low unemployment benefits and countries with high unemployment benefits and low low job protection so here on this figure you have a measure of job protection which is the costs of the food that the firm uh face when the firm went to to fire workers and the more you go on the on the right the more drug protection is is important so this is the oecd measure of the drug protection and this is an index on which i cannot give you any details it will be too long but if you have some questions after i can answer to them and on the vertical axes you have the amount of unemployment benefits which is the expenditure per unemployed worker divided by income per capita in each country so you see that in denmark we have very important expenditure for each unemployed worker and very large protection as i said before denmark is really at one extreme and when you look at greece sport italy and portugal you see that they are at the other extreme and we have very important job protection and very low unemployment benefits which means in other words low expenditures for unemployed workers and if we relate these uh features to the labor market performance you see that you have some relation that can be seen on this figure but if you do more sophisticated analysis you see that these relations are really there they are more robust that what it appears on the figures so you see that you have actually an increasing relation between the participation rate and the unemployment benefits so on the horizontal axis on the left graph this is the same definition of unemployment benefits as before and then the vertical axis it is what we call the participation rate which means the number of people who participate in the labor market that is to say that are either employed or unemployed divided by the number of people who are in working age that is to say between 15 years and 65 years and you see that denmark has a very high participation rate and very high unemployment benefits with respect to countries like italy spain greece here and overall there is a positive relation between these two these two these two variables and if you look now at the right-hand side inside figure you see that you have a negative relation between the degree of child protection and the participation rate and here too you have a very strong opposition between denmark and italy on this on this on these figures so the question is why is denmark so different why is it the case that um danish people have been able to choose another model that seems too many uh people who live outside these countries to be much more efficient than the the model that we have in south and europe our hypothesis here and what we are trying to show in uh in our and what we do is that this thing is really linked to a strong civic virtue of danish people to the fact that people danish people do not behave in an opportunistic way uh when they asked for public transfers and uh why is it so what is the link between civic view to and and flex security the idea that the flex security model is more difficult to implement in in countries where there is a low degree of civic-ness because this kind of model can work only if people do not behave in a way that is not too much opportunistic so let me more be more explicit about that and the first the first idea that uh to to understand what is going on here is that we have to understand that opportunistic behavior uh are a barrier to implement efficient unemployment insurance obviously if you want to give high unemployment benefits to people you have to make sure that people are not going to keep this unemployment benefits and to go to work on the black market or just to stay to to stay at home and obviously you have to control for that but it's much more difficult to control when you know that people are systematically opportunistic that there is no social pressure to push them to work if they benefit from unemployment benefits and this is a very general problem that we have in any insurance issue when you have car insurance you want to make sure that people behave in in in a good way so we know very generally or generally that when people are more opportunistic it is more costly to insure people and so from this point of view we can understand that if we have and we can understand what could be an efficient unemployment insurance system so an efficient unemployment insurance system will be a system where you can give high unemployment benefits to people because you know that these people are going to look for a job even if they have a high unemployment benefit if it suffices to has them you should look for a job i give you much money and and you look for a job and people do it so you can do that it is easy to insure people in that case and so if people benefit from high unemployment benefits they are not afraid to do their job so you don't need to because they don't have big uh uh loss of income when they lose their their job and then you can uh you can have a larger protection in that case and uh obviously if you have this kind of thing you will have an efficient labor market people will be happy to work and they will not uh be afraid to be unemployed and people would come in much much more often in the labor market so you should have also a high participation rate and so what we we should expect is that in countries where people have high civic virtue uh then there is uh there are less opportunistic behavior and then we should expect that in countries where you have high civil virtue you have uh higher number one benefits low job protection and high participation rates and what we want to do here is to go from this very abstract id uh to go from this very abstract id to the facts can we find that in the facts can we find that really there is a relation between civic view too and the organization of the unemployment uh insurance system and job protection and obviously to answer the question this question you have to to to raise the following question what is civic virtue how can you measure your civil virtue because in economy we are used to speak with numbers and we try to follow this tradition because because we think that it makes sense to measure things and by chance we have we have many surveys that that give you some uh some hints on what civic virtue is so our definition of virtue will be the way people answer to the following question do you think that it can always be justified never be justified or something in between to claim government benefits to which you have no rights and the answer scales from never justifiable to always justifiable and we have survey uh so we have many questions we have this we use uh a survey which is a world value survey in which there is this question and so the world value survey actually covers many countries uh since the beginning of the uh of the 80s we only use 25 countries but actually there are more than 60 countries now and there are so three periods and they are in each period and in each country at least 1 000 people in each country and obviously we don't ask only these questions to people we asked many many many questions to this to to the people uh who are surveyed and uh from this point of view we have also we have other measures of uh of uh uh uh who have other questions that help us to understand the the civic attitude of people we know whether people consider that it is important to cheat on taxes whether people trust other people whether people participate in charitable organizations whether people find it acceptable to cheat in public transportation and so we use all these questions and you see that the answers are really consistent for instance you see that people think that the other people are not civic uh in the countries in which it turns out that people say that they don't consider that it is a very important issue which on government defeats and also there have been many experiments to try to understand whether people what people claim is consistent with their behavior uh because you could think that okay this kind of survey is not very interesting because people can say whatever they want in when when they are ask questions and there is no con there is nothing there to to to very interesting and actually so there have been some experiments many experiments showing that people uh what people claim seems to be related to their real behavior so just one example just one example which is very well known uh there is an experiment which consists in uh losing uh wallets in different uh countries with some money in it and with the name of the owner of the wallet and uh there is a number of wallets that are returned to the police is uh much higher in countries where people on average have more civic virtues in countries so you so you have many experiments like that which shows that at the end it seems that really there is some consistency to to to what people answer to these questions it's not just nothing and so now let's look at what are the differences in civic attitudes across countries and what is striking is that there is a very high heterogeneity so we look at the way people answer to the question is it just difficult to ask for government transfers to which you have no rights and you are rescale things so that we give a score equal to one if people say that it is never acceptable underscore of zero if people consider that it can be acceptable so and this uh bar that you have here for instance for denmark means that in denmark you have 88 sorry 86 percent of people who say that it is never acceptable to to ask for government transfers to which you have no rights and you see that uh obviously uh what is what is striking here is that uh the upper id that we have in the countries shows up in the data you see that in nordic countries people seems to be quite civic from this point of view then after you have the anglo-saxon countries and then when you go right you are you are going more to southern countries and mexico here italy is not bad from this point of view and uh but it makes uh i mean uh for this question italy is a little uh different from the other questions on taxis and other things but uh you in for this question italy is quite is quite uh is quite good with respect to a country like france france is really very very bad for these kind of questions and france is very bad for many many questions actually uh france italian is on average better than france for for many of these questions and so what is also striking when you look at these things it is that there is a very strong stability of cross-country difference in civic attitudes if we take the mean reply in 80s which is on the horizontal axis and the mean replies at the uh in in let's say you are to southern you find that you have a very strong correlation it is very stable denmark is still very high in the beginning of the 80s and the near to southern france is very low unfortunately italy is not there because italy was not in the survey in the uh in the in the 80s and there are less countries here we have 25 countries here the only 15 countries and so obviously you could think that these differences these differences between countries are linked to the fact that people are different across countries people have different degrees of education people have different religions also the age structure of the countries can be different the family status can be different the income can be different and if we want to know whether these differences are linked uh to um to um to uh the country or are linked to the fact that people in different countries have other features that explain that they behave in different ways we have to to take into account these things and so what we have to do is that we have to compare people of the same age the same gender shame education level same income same employment studies family status same religion from different countries so since we have a sufficient number of observations to some extent we can do that and we can esolate the what we call the country fixed effects the differences in attitudes that is due to the fact that people live in different countries comparing people with same sex age education family studies religion religion is very important because we could think that people who are catholic behave in a different way that people who have no religion or behavior in a different way that people who are protestants we have decided that protestant people are more much more civic than people with no religion and also more civic than people who are catholics and is it right uh well what we can see that to some extent it is right i will not show you this number for the differences in in individuals feature that like religion and education so what we find is that people who are more more educated also have better virtue uh also civil virtue increases with age um people who are married and who have children has higher have higher civic view to people who have a religion have higher cv virtue than people with no religion and among people with religion people who the people has the highest civil virtue are protestant people so we find what we what we expect to some extent and what i want to do to show is the relation between the country fixed effect and the mean reply and so this number on the horizontal axis don't make big sense but these things here these things which is important is to look at the way the two the two things are related so on the horizontal axis you have a measure of the country fixed effects and on the vertical axis you have the mean reply and the important is that these two things are very very correlated this number that you have at the top means that 90 94.5 percent of the dispersion of attitudes across countries is due to these country fixed effects it is not due to the fact that people are different so you have only a little more than five percent that is due to the fact that people have different ages across countries different family statues religion and different level of education and different income so the country fixed effect is really very important it takes place a very important share of the differences in attitudes and actually we find these kind of things for many many attitudes uh obviously we find these kind of things for attitudes like trust the trust that you have for people who live around you but also for things that are related to to other things that we don't look at here but for family family values you see that the way that people consider family the role of the men in the family the way you should raise your children as also a very strong heterogeneity across countries and that is heterogeneity is really related to country fixed effects the fact that you live in one country much more than to the fact that you have different religions or political ideas or things like that on average obviously and so now that we know that there is a very important cross-country heterogeneity in civic attitudes and that this course contributed virginity seems to be really linked to country specificities and to the fact that people are to some extent have that there are other differences in people across country that could explain these differences we have to to to look whether there is a link between civic attitudes and economic behavior because to some extent what we want to show is that if people are more opportunistic that is to say if people have low civic attitudes uh but low civic virtue we should expect that they behave uh in a way that is not the same that people with high civic attitudes and what we can see in the data that individuals with low civic view two are more unemployed so people will declare that it is not very important if you ask for government government government transfer to which you have no right are more for unemployed but obviously you can think that when you are unemployed you're in money and this is completely logical if you are an employee to say that it's not so so important if you ask for an opponent or for government transfers to which you are not you you have no right because you need them much more but so it is to to to some extent interesting to see that we have this relation but there is it is not a causal relation here actually it is very difficult to show that you have a causal relation but we can go a little further and so what we show is that what we find in the data is that people with low cv virtue are more likely to be unemployed in countries where there are higher unemployment benefits so when you when you are even when you are in country with high unemployment benefits then you see that people with low severe virtue are much more often unemployed the probability that these people are unemployed is much higher than people who have uh high civic virtue and it is not anymore the case where in countries where you have very low unemployment benefits which seems to to suggest that people uh with a low civil virtue are able to exploit to say to some extent the system and do that much more frequently when the system is generous so when the system is not generous obviously you should await nothing from opportunity behavior because you cannot you cannot take advantage of the system but when the system is generous if you are opportunistic then you should have a very different behavior than people who are not opportunistic and that's what we find in the data so it seems that there is some relation between what people think about uh civicness their civic attitudes and their economic behavior and so now that we have all these things what we do is we try to look at the the causal relation uh between civic virtue and the unemployment insurance and efficiency that is to say now we want to look at all these countries that we have to see what is their level of unemployment benefits the average level of unemployment benefits in each country the level of job protection in this country and also to look at the average level of civic virtue in the country which we measure by the the share of people who say that it is never justifiable to cheat and unemployment benefits and we want to look at the relation between these variables and what we find is that there is a negative relation between cv virtue the average level of civil virtue in the country and the level of unemployment benefits and we also find that there is a positive relation between sorry this is just the opposite there is a positive relation between the unemployment benefits and the level of civil virtue in the country as i explained before if people are very civic there are there are few opportunistic behavior and you have high unemployment benefits that is our prediction and we find that in the data and also we find the negative relation between employment protection and the degree of civil virtue and we also find that the participation rate of young workers is much higher in countries where you have high civil virtue and this is related to the fact that when you have high civic virtue you have a larger protection and it is quite easy for workers to enter into into into into employment because when you have drug protect loads or protection then the workers turn there is a higher turnover of jobs uh of uh workers who are in uh in adult workers who are more than 25 years old and these people move more often and there is more turnover in the labor market and it is a way to allow the young workers to integrate into employment because in countries like italy or france we have a very high unemployment rate for a young worker which is due to the fact that it is very difficult for young workers to find stable jobs and so we find that when you have this high civic virtue we have an efficient animal permanent benefit system and there is a low uh unemployment rate of work of young workers and high participation rate of young workers but obviously when you look at this correlation the issue is that correlation is not causality we find this correlation between these things but it could be the fact that if you challenge institutions if you change a number of these upon the unemployment benefit system people are going to change their behavior and going to become civic so imagine that for instance in italy we decided to challenge the unemployment benefit system to give high unemployment benefits to impose some control of them on the the way you give an employment benefit this is to say to help people to find a job but also to control that they really look for a job uh we call this thing that italian people are going to change very very very very quickly because they're leaving a different system the same thing for grey people french people and so if it is the case i i mean civic virtue is not an issue there because it's sufficient to to to change the system and then people are going to challenge so we have to know whether there is some inertia in civic attitude are the civic attitude something like a cultural thing that we inherited and that we challenge a rapid and that we we need time to change or can they change uh rapidly and so in order to look at at this issue the influence of culture uh what we do is um that we look at the civic attitude of people who are born in the u.s so we all live in the same economy and we have always lived in the same economy in the same with the same institutions in the same environment but who have different uh country of ancestry because we look at the us because obviously in the us people originates from different countries we have an important share of people who originate recently for different countries from different countries and we have the data to look at this to look at this issue to look at the influence of the country of origin on the civic attitude of people and what we find we find that there is a very strong influence of civility of the of the country of origin of the attitude of people so before showing you i describe you very happily the question that we use so we use a survey that is uh called the general social survey that is uh that exists in the us since uh uh 72 and it is a very big survey where you every year you you have you have some people more than 2 000 people every year to which you you raise questions and we ask them exactly the same question as a question that we use before in the world value survey about civic attitudes and also a bunch of many other questions and we also have the question from what country or part of the world did your ancestor come from and is there if there are there is more than one country which one of these countries do you feel closer and also we know in this survey whether the parents arrived or the grandparents arrive so we know many things about about the ancestry of the of the people and we use actually two two waves uh and uh we only use 17 17 countries because uh 16 countries sorry because uh obviously even if there are many immigrants in the us you have countries from which you have not so many immigrants and uh you don't have enough data to to look at what you want to do for any for every country and so what we did after is that uh we looked at uh the relation between the civic attitude of american uh by a country of ancestry which is uh on the horizontal on the uh on the horizontal axis and the civic attitudes uh in countries of residency so for instance if you look at italy and if you look at the vertical axis on the on the vertical axis you have the proportion of italian who consider that it is uh it can be acceptable to on government benefits and you see that this proportion is 25 percent higher than for danish people because here the zero danish is a reference country we are looking at the differences with respect to danish people or people who originate from danish origin and you see that italy you have 25 percent less than danish people okay so the idea is that this number of 25 percent indicates that on average when you take italian people with the same sex age uh the same income than uh danish people on average people in italy save uh 25 less than it is it is never acceptable to cheat on government benefit on government benefits so this is what you have for people who live in italy under vertical axes and then on the horizontal axis you have the same thing for people who live in the u.s but who have different country of origin and here actually we have seven generation americans and this figure and so you see that on average if you look at people who originate from italy with respect to people who originate from denmark on average these people consider originated from italy consider that 15 percent more frequently that it is not a big problem if eugene government benefits and if you look at all the dots here all the the countries you see that there is a very strong correlation between the civic attitude in the country of origin and the civic attitude of people who currently live in the u.s and this suggests that you have a strong inertia in behavior and if you look at the third generation uh americans you're still seeing a correlation which is less important obviously and even for the fourth generation americans which really seems to to show that you have a strong inertia and that it is not that easy to change civic attitudes um obviously it doesn't mean that you cannot change them but it seems that civic attitude to some extent are have some inertia so when we look at the correlation between the civic attitudes and the institutions and the labor market performance it really seems that civic attitudes are a constraint on the way you can you can you can implement institutions so from this point of view we think that civic virtue is an important ingredient to to to to to to implement uh the flexi security model but obviously there are many other elements this is not the only elements there are some other elements like the political organization and many other things this is not the only element but it is we think an element that plays an important role and what we think that it is if we want to implement reform it is unlikely that we could succeed to have important reforms in the efficiency of the labor market looking at this issue of unemployment benefits and job protection we are without a comprehensive policy that tries to affect uh cv behavior because when you when you try to understand why people have bad civic behavior you it's you you can you can understand that it is also related to uh the organization of of of the society so what we want to say here is that you have some inertia but obviously in the long run civic attitudes are also influenced by the institution in which people live that's what you see in the u.s you see in the us that generations after generations we have some convergence in in attitudes but it takes time so if you want to change attitudes you will you really have to also to change institutions but it will take time and you have to take into account these interactions between these two two things for instance what we know is that if you live in a corporatist country where there are different advantages for different professions or different industries it is not very helpful to develop civic attitudes because people always think that the other professions or the other industries have advantage that they do not have and they pay for it and also if you have countries where you have many means tested policies which are not well targeted it can be very bad for civic attitudes for instance in france uh we have something like 60 percent of the people in france who are eligible to social housing but we have only 20 percent of the people who get social housing so there is his when you have this kind of policy it is a big problem because you think that people who are in social housing get it through special ways that are not necessarily very honest and especially for those who have nice house social housing in the center of paris and this is very bad for civic at issues because when you begin to see that the other then you say where should i wish to like i could associate you so we have many experiments we show in social science that when you know that the other people take advantage of the system you do the same thing so from this point of view when we imp when we try to think of the way we uh we design policy it is very important to design policy in a way that is able to sustain political civic attitudes and obviously from this point of view it is very important to know more about the dynamics of values and preference and also how this value and preferences are influenced by by the institutions but this is a research program and i think that we need to know much more about these issues to know how to deal with elma okay i will stop here thank you for your attention so usually we are always very worried about whether or not flex security is expensive too expensive to be financed in a traditional word for state and the answer is no and this is why we think it's not exportable now if i understand you correctly you're telling us it is not exportable also for cultural reasons and am i right in understanding that you deliver pretty much a pessimistic message about it and well i would like to ask you whether this is a chicken and egg question because if you have a dysfunctional institutional system you will have lower civic attitudes but then in order to have higher civic attitudes you need uh probably functional institutions so it's a bit of a very difficult dilemma to solve if i might add a question have you tried the same surveys in israel why am i talking about israel because you have a population very homogeneous in religion very high social control like uh in nordic countries but people coming from all over the world so it could be very interesting to see what the result is there or not a point is do we get a pessimistic uh message from your presentation and then is there an interrelation between the civic altitude of people and the institutions the quality of the institutions and the third question was can you do the same sort of survey in israel because there are a number of reasons to do that there is another question which is related to that i think that my question is related to to the previous one and also to what has been said about the pessimistic message so my question is after seeing the conclusions uh stating that basically it is impossible impossible to reform the labor market without a policy with an impact on uh civic altitude there is translation but on another channel you should go for the channel please try and find the channel where you can hear the english translation okay can you hear me now so based on your conclusions namely the fact that the reform of the labor market is basically if impossible unless you have an impact on civic attitude as well the survey which has been made with the aim of assessing the impact of the civic virtue on the model so my question is why not including the political system or class in the various uh countries because that could give us an indication a valuable one well certainly this was a related question and indeed the question was you made a survey on the general public so perhaps it would be meaningful to also include the bureaucratic uh system of a country in the same survey to see whether we get any significant information from that okay thanks thank you uh on the first question uh i don't think i'm very basic it's not necessarily it's necessarily a pessimistic message it is a pragmatic one i think so what we we we say first it is that i mean it is it is a work that we are doing so we should we should take it seriously but also we have to to be more precise about it for instance if you look at italy italy there is a very strong heterogeneity between the north and the south and actually most of the it is very interesting to see that many of the work and social capital come from italy and come from this fascination about this opportunity opposition between the north and the south of italy you know the work by socialist ben banfield and also robert putnam who is one of one of the father of of of um social capital really worked on italy so it is a very interesting country from this point of view we have a very strong heterogeneity across north and south in italy and uh uh from this point of view in our analysis we don't take that so much into account and we have to do this but still i think that okay sorry but still i think that's we we have here some results and uh it is pragmatic and i think that it can be helpful uh to the extent that for instance what i say is on the way that you should uh design the economic policy uh uh is important to the extent that we should be aware that we design economic policy we could have an impact on civic attitudes in the long run for instance if i take an example here in italy you have a debate on the minimum wage okay and in france we have a very high minimum wage and a legal minimum wage that applies to anyone in the country and with the anagon we have done some work on this and what it appears is that in countries where you have high minimum wage you have not so much social dialogue and so people do not interact people wait for the state to set the wage and people do not interact so people do not communicate and this is not very helpful to develop social trust go social attitudes and because people because people it does not push cooperation in the workplace and so usually this kind of thing is not in the public debate you don't you are not aware that if the wage if the wage is said by the government it will destroy uh to some extent social dialogue and actually when you look at the data and when you look at the dynamics of the union density and the trust in unions in country where you have high minimum wage it is very bad and we do when you look at the uh the dynamics of of of union density and trust in unions and and also to some extensive behavior it's much better in countries where you you don't have a minimum wage that is fixed by the states as for instance in other countries you have obviously minimum wage but they are not set by the by the state they are it's not a legal minimum wage it is set by uh the industries so so we should be we should really take i think i think into econ this kind of thing if we want to to to to understand the implications of public policies and from this point of view i think that it can be helpful to have this kind of this kind of analysis is not just to say that we cannot change anything i think that we can change things but we should be over aware of the impact of the change that we make in the long run and so we should be aware that civic attitudes on many attitudes changes when you we change the environment and so from this point of view i agree with you that we could go to a bad equilibrium where i mean you can think that there are good equilibrium and bad equilibrium and that we can go slowly to very bad situation where people are very bad civic attitudes bad institutions and that we are in a very bad situation and uh i i really worry of of that from many southern european countries i live in france we have the same kind of problem and uh so i think that being aware of these dynamics of civic attitude could be helpful to figure out how we could go out of these things when we implement public policies and on the second question i would say that um actually we have integrated uh the uh political variable in the uh in the in when we look at the correlation between uh the average degree of civic attitudes in each country and the unemployment benefits and job protection so if we look at what we have done in more technical way we have also when we look at this correlation we have also taken into account the fact that that the countries have different different political system and the way we we do that is that we integrate country fixed effects so the idea is that we look at the change of civic attitudes uh across countries and the challenge in the level of unemployment benefits and drug protection across countries uh for each country is on average this is a and this is a way to look when you look at these dimensions of the correlations it is a way to make sure that this correlations between civic attitudes and job protection and unemployment benefits does not come from a feature of each countries that are fixed over time for instance the fact that these countries have different uh geographical localization or different political system uh so this is a way to do that and we do that we we do that so we control for that kind of things to some extent so sorry for israeli uh it's a it's a good it's a good good idea i know that there have been many things doing with the taking advantage of the fact that you have many immigrants in in in israel but i'm not aware of this kind of thing for israel so obviously israel is in the world value survey but there are only there are only 1 000 people on it was so it is not enough to do what we want to do so because what we do in the in the in uh in the us we we use another survey where we have more than 100 000 people and so we can do we can do many things so it's a good idea we we we should have to check whether surveys existing in israel thank you for this uh this idea politicians in general can destroy de facto this social capital or enhance it foster it and so i ask you how uh you assess and consider a prime minister who states that people are justified not to pay taxes if they are too high i understand that if they are high nobody is happy but when the prime minister says don't pay taxes because they are too high how much of the social capital has it destroyed and what remains left of this social capital so the question pertains to social capital and politics in a general sense and so perhaps we should stop there and leave out the second part of the remark actually we still when we look at the data you have a very strong correlation between uh indicators of uh uh of corruption and on the uh and the quality of civic attitudes and trust there are many indicators about the corruption of the degree of corruptions of different countries they are very easy to to look at if you look on the web there is on the world bank has developed made indicators so these indicators come from survey where you ask to people better so to to citizens but also to people in the united administration their view on the transparency of the of the administration and uh there's also a very important uh institutions which name is transparency international which has a very nice website where you can see the ranking of countries so this is an uh independent institutions so we have many quite good data on this and you really see that there are very strong correlation between the the degree of transparency of the of the government and the uh and the quality of civic attitudes so from this point of view i think that having an administration which is efficient transparent is very good to develop civic attitude this is completely logical because when you think that the other people behave in a good way then you feel that it makes sense to behave also in a good way to pay your tax because you know that the other pay your tax and that benefit that people get it it makes sense and so from this point of view it is completely logical and that's what you see actually in the data and obviously in scandinavian countries you know that taxes tax rate are very high and uh that it uh i think it's related to what i've just said people accept that because they know that we we do we do good things we stack with taxes and that is that the benefit that we give uh that people get is because people on average deserve these benefits uh very very frequently so you accept to pay for these taxes and uh i don't know which prime minister said that but obviously it is not very helpful to to develop civic attitude if you want me to say that i agree to say that okay uh i would i would object a little bit i would have i i would object a little bit on the fact that the danes are genetically somehow better than the others meaning that they have this and also the two questions that were posed before they posed the attention of somehow on the importance of institutions institutions that are reliable efficient and credible and you have basically that in denmark and the reliability of institutions and the efficiency of institution creates in fact civic attitude and i think that all the data you have presented can be in fact interpreted in terms of of this uh institutional aspect that is the days cannot cheat itself then if you cannot cheat and you are asked do you think that it is important to you know it to be sort of absolutely that with the others you know that you cannot do it i mean you cannot cheat then you answer of course it's important because you know that the system is relatively efficient and that is uh it's an important factor there i don't think that the danes are particularly better than the others they have built institutions that created that civic attitude basically especially tv so we don't say that danes are genetically different uh and actually that is exactly what so what we do is that we look at people who are born in the u.s and people who live exactly in the same environment so first thing is that we see that these people really are influenced by their country of origin so which means that you your objections to say that tennis people behave differently because they have they live in different institutes in different country with specific institutions that is to answer to these objections that we look at people who live all in the same environment in the us but we have different origin and to show that these people are influenced by the country of origin so i don't i don't think that this objection is very serious to the extent that that is exactly what we want to to answer to and then after we don't say that it is these differences obviously are linked to any genetic specificity uh we only want to stress that there are some inertia but obviously it's not specific and there is something which is interesting that if we look at the uh still at the data of people who are born in the u.s what you see is that if you look at the different generation generation of immigrants we are able to look at the influence of the country of region or regions for people who immigrate in the u.s before the second world war and so you still see an influence you you still see that people whose uh ancestor came before the first world war you see different you see an influence of the country of origin so people who originate from danish from denmark are different from people who originate for france but you see that over time there are changes and it seemed that the last world war at a very important impact if you compare uh i know for french i didn't check for italian but if you if you can compare french and swedish people they have the same they are the same civic attitudes uh before the before the second world war and apparently during during the second world war there was there was i mean a lack of trust due to the fact that we have the german occupation and then after many people collaborate and many and we also design other institutions after the second world war and it seems that there have been a strong drop in civic attitudes in in in france after the second world war with respect to what was going on in denmark so it seemed that it changes over time it but it really takes time to change so that's just what we want to stress i see that you don't agree but we can discuss after just just a remark if it is uh if i can be allowed to reply the question of causality now when you it's the only slide that would be difficult to interpret eventually the american the the days that were transferred to the united states and but but that it's uh you can the causality goes in terms of why where the institutions created in the first place and that that there is a point there but you have that in the danish history in the danish edition in the scandinavian tradition you have a tradition of a social democratic tradition that goes before world war ii so the institutions were there before and the certain culture was there before you cannot explain the last five six years of the success of denmark it's the causality goes you can explain you can use civic attitude attributes to explain why did the institution start many years ago and but that does not explain much of the high civic attributes that you have today that is more institution no i agree with you perhaps that the term causality you know like is too strong so this is this this is a interactions between two variables and what we just want to stress is that you have some inertia in civic attitude it cannot change instantaneously instantaneously and so from this point of view there is a causal relation between between between civic attitude and institutions but obviously you have also uh the causality that goes the other ways around because you have a dynamic you have some dynamic interactions between these two variables what with the message i would just like to to to to to give is just that civic attitudes make imply some constraints on the way at one point of time on the way you can design institutions that's all what we say we want to say the government and the unions that is the extension or renewal of the agreement of 1993. at that time in 1993 there was a clear political project and all social partners were focusing on the introduction of the euro and on its economic impact nowadays things are different because we don't have clear political objectives do you see any differences across countries in the study you have carried out i mean the question concerns the principle and the role of institutions which have an impact on civic attitude so the question concerns political projects and objectives in the different countries and do you think that a clear political project may have an impact on civic attitude have you seen this in your studies i agree that to some extent social cohesion the idea that social cohesion could help to for people to to share common objectives and uh to develop social civic attitudes so i agree with this idea i think it's very good idea but it's very difficult to to to to to define what is a clear political project so i'm not aware of any survey where you have this kind of questions if you it could be very interesting to look at but i i don't know any survey where we could look at this kind of issue i have to think about it but i really agree with the general idea that you you have that defining a clear projects that people understand is important to to help to develop civic attitudes from this point of view explaining what is flake security that it is the aim is not just to destroy jobs but to to try to give more uh security to people is perhaps a way to try to help to uh to to to to give some uh some sustain to to to this kind of uh of projects and to help people to understand that it makes sense and to believe in it is it's very important and also the the relationship between civic attitude and political institutions is very important but are companies required to have a civic attitude what about companies do you think that companies actually need a civic attitude or are there differences in the different countries from this point of view yes you're right there are differences across companies there are survey where you uh where uh sorry there are surveys that show that kind of thing that countries or people actually managers of different countries have different attitudes so this survey in this survey you ask to people whether different companies that originate from different countries try to corrupt the administration more often which to say the example for instance let's let's take uh france uh we asked to people who are in france to manager in france whether companies or that originate from the uk the us india try to corrupt the administration and so we have this kind of survey it is in uh i think that we can find it in transparency international and you see that there is a very strong correlation between the average level of civic attitude in the countries and the way uh managers behave in in the foreign country so from this point of view also this kind of attitude seems to be shared by most people hello my question is the following we have clearly understood the connection between civic attitude and politics well my question is in the flex security model how important is the geographical structure of a country the structure of the industrial fabric because in italy there's no homogeneity you know we have different industrial districts or clusters with specific competencies but this organization limits the growth in other sectors so the question concerns the interconnections between civic attitudes and structural variables in the economic system okay the your idea is to say that so in italy you have a system where you have much more height opportunity across across region and it can be bad for civic attitudes so just i think to some extent you're right there are many paper many contributions which show that social cohesion easily and so civic attitudes and the trust that you have for other is linked to the some measure of the degree of fraction fractionalization of society so when you have so you have different dimensions of fractionalization when you have many people with different religions so you have you can have fractional fractionalizations that that is linked to religions but also to ethnicity also to language so when you see that you have a more fractional society then you have less trust and not very good civic attitudes on average so this is this act as a constraint which implies that it can be more difficult to develop social attitudes and civic attitudes when you have more fractionalization from this point of view but this is only a constraint you can you can try to you have to take into account but i agree with you that it is more difficult to develop civic attitudes when you have more fractionalized society many empirical evidence show that it is the case but to some extent italy is not so much fractionalized to many to many extents there are countries which are also like the for instance the u.s the uk which are also very fractionalized at least as italy and whereas the degree of civic virtue is much higher so there is still some degree of freedom to improve things naively i tend to associate the high level of job protection in italy with the fact that we have very powerful unions and then the unions tend to cater much more to the employed people than to the unemployed ones i was wondering what the danish situation is in this respect i tend to associate the high level of job protection with the fact that we have powerful unions that cater mostly to the employed people i was wondering what the danish situation is in this respect in america so so traditions are very strong in denmark more than 70 percent of people are belong to trade unions but the fact is that trade unions manage the unemployment benefit system to a large extent so they obviously take care of the unemployed people because they want them to find a job otherwise it's very costly for them so you can have you can have a system with very low drug protection and very strong trade unions and actually if you look at the cross-country differences it turns out that in the nordic countries that is a place where trade unions are very strong and even they they their the union density increased over the last 30 years so you don't observe a decrease in trade union density and that is in this country that the labor contract become more and more flexible over the last 10 years and so you can have very strong trade unions that agree to have this kind of flex security system and it also if you look at the things uh it turns out that the flexi security system was implemented through social dialogue it was not implemented uh only with the intervention of the state which is also current with this idea that you should have a cohesion on this project on a trust on good civic attitudes to to develop such a project so we need trading from this point of view generation of immigrants so did you consider whether it was a first generation or third generation of immigrants because in the third generation you start having a loss of identity so to say so would be interesting to consider whether data still remain the same or not in relation to the third generation that was the first question the second question is has any survey been made or analysis been made in relation to the type of social pressure which i believe you mentioned uh in relation to denmark in your contribution uh in relation also to its impact on one's critical uh sense and the company situation or environment other countries i don't know whether i was clear enough or not actually there are two parts in your question first and foremost you are asked to further comment upon the differences between generations of immigrants in particular in relation to the third generation and then the role of pressure social pressure in determining civic uh uh attitude even more optimistic things perhaps about italian and southern european countries but on the first question actually we did that we looked so the result that i've shown to you is for seven generation americans which means people who were born in the us but whose parents arrived in the u.s and when we look at third generations are americans which means people with grandparents arrived in the us you still see an impact of the country of origin but you see that this impact is lower and if you go on it becomes slower and lower which means that you have some converters okay so this is uh the answer to the first question another second question you're right uh to the extent that uh it seems to be okay that in nordic country there is a very strong social pressure to uh to induce good social uh attitudes uh uh we know that the neighbors are looking uh whether you behave in a good way and uh uh i don't know any i'm not aware of any uh survey on this we we we began to thought about these issues and to some extent it indicates that from a welfare point of view you could have some negative aspects of very well developed civic attitudes if you develop good civic attitudes only because you have the pressure of your neighbor who are always looking at what you do you know perhaps do not want to live in this kind of society so perhaps that we should not go too far in this direction and perhaps that it is more much more pleasant to live in a country where you have to something some bad civic attitude not so bad but and well you have more freedom so uh we don't want to say that we should live in a country where uh the the the the best outcome is uh an outcome where everyone put a very strong social pressure and on the other to respect uh to respect the law we should keep some freedom but uh uh this is uh this is very complex issue and we have to to think more about it to to know what would be the good level of social attitudes this is very far from what we have just begun to do okay i thank you for all these questions i think that we we have to stop now this meeting and we thank a professor for his contribution and you