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Labor market institutions and preferences for redistribution

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  • Serra-Sala, Clàudia
  • Sorribas-Navarro, Pilar

Abstract

In highly segmented labor markets uneven distributions of risk across worker groups can lead to varying demands for redistribution. We study the impact of economic insecurity, associated with temporary contracts, on individual preferences for income redistribution. The Spanish labor market, where one-third of workers are employed under temporary contracts, provides a good context for this study. We use data from the European Social Survey from 2002 to 2018 and apply an exact matching methodology to isolate the effect of the contract type from other individual characteristics. Our results reveal that temporary contracts lead to an 11 percent increase in the likelihood of strongly supporting redistribution, irrespective of individuals’ education level or sex. In terms of age, the effect is concentrated among individuals aged 40 and above, indicating an increase in risk perception when this contractual figure is perceived as a dead end. During periods of macroeconomic uncertainty, when insecurity extends beyond the contract type, redistribution preferences of workers with temporary and permanent contracts equalize due to a substantial increase in the preferences of those with an ex-ante more secure labor market position. Our results provide evidence that economic insecurity caused by the design of labor market institutions is a strong determinant of redistribution preferences.

Suggested Citation

  • Serra-Sala, Clàudia & Sorribas-Navarro, Pilar, 2025. "Labor market institutions and preferences for redistribution," European Journal of Political Economy, Elsevier, vol. 90(PB).
    • Handle: RePEc:eee:poleco:v:90:y:2025:i:pb:s0176268025001259
    DOI: 10.1016/j.ejpoleco.2025.102765
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    1. Roman Horvath & Matej Korinek & Laurent Weill, 2026. "Does Finance Change the Taste for Redistribution?," Working Papers IES 2026/10, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jun 2026.

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    Keywords

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    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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