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Experiencing Booms and Busts in the Welfare State and Support for Redistribution

Hansen, Kerstin F. and Stutzer, Alois. (2021) Experiencing Booms and Busts in the Welfare State and Support for Redistribution. IZA Discussion Paper, (14327).

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Official URL: https://edoc.unibas.ch/86156/

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Abstract

We analyze how the exposure to adverse macroeconomic conditions during the "impressionable years" (i.e., between the age of 18 and 25), in interaction with welfare state institutions, forms political attitudes in adulthood. Based on a large panel dataset of European countries, we find that individuals who experienced high unemployment under a regime of low unemployment benefits are more in favor of redistribution later in life and state an orientation more oriented towards the left. However, negative economic shocks in an environment with a very generous unemployment insurance are related to less support of redistribution and a more rightist political attitude later on. The development of the welfare state thus seems crucial for how economic shocks affect the evolution of preferences and norms in society and thus finally feedback on institutional change.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Politische Ökonomie (Stutzer)
UniBasel Contributors:Stutzer, Alois
Item Type:Working Paper
Publisher:IZA - Institute of Labor Economics
Note:Publication type according to Uni Basel Research Database: Discussion paper / Internet publication
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Last Modified:24 Oct 2022 10:46
Deposited On:24 Oct 2022 10:46

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