How do social norms affect unemployment today?
Social norms can profoundly influence unemployment. My work, like 'A Theory of Social Custom,' explores how norms can lead to outcomes like persistent unemployment even when the market might technically be able to absorb more workers. For example, if there's a social norm that it's inappropriate to work for less than a certain wage, even if that wage is below the market-clearing level due to, say, a temporary downturn, unemployment can persist. People may be unwilling to accept lower wages, and firms may be hesitant to offer them, reinforcing the norm.
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