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Culture, Diversity, and the Welfare State

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  • Klaus Gründler
  • Sebastian Köllner

Abstract

We show that culture and diversity strongly influence welfare systems around the globe. To disentangle culture from institutions, we employ regional instruments as well as data on the prevalence of the pathogen Toxoplasma Gondii, linguistic differences, and the frequency of blood types. The generosity of the welfare system is higher in countries with loose family ties and individualistic attitudes, high prevalence of trust and tolerance, and low acceptance of unequally distributed power. Apart from their direct effects, these traits also exert indirect impact by influencing the transmission of inequality to redistribution. Finally, we show that redistribution and diversity are linked non-linearly: moderate levels of diversity impede redistribution, while higher levels offset the negative effect.

Suggested Citation

  • Klaus Gründler & Sebastian Köllner, 2018. "Culture, Diversity, and the Welfare State," CESifo Working Paper Series 6856, CESifo.
    • Handle: RePEc:ces:ceswps:_6856
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    2. Benos, Nikos & Kammas, Pantelis, 2023. "The effect of ethnic diversity on the participation in social groups: Evidence from trade unions," European Journal of Political Economy, Elsevier, vol. 77(C).
    3. Vu, Trung V., 2022. "Unbundling the effect of political instability on income redistribution," European Journal of Political Economy, Elsevier, vol. 75(C).
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    5. ten Kate, Fabian & Klasing, Mariko J. & Milionis, Petros, 2023. "Societal diversity, group identities and their implications for tax morale," Journal of Comparative Economics, Elsevier, vol. 51(3), pages 1048-1067.
    6. Assmann, Daisy & Ehrl, Philipp, 2021. "Individualistic culture and entrepreneurial opportunities," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1248-1268.
    7. Amendolagine, Vito & von Jacobi, Nadia, 2023. "Symbiotic relationships among formal and informal institutions: Comparing five Brazilian cultural ecosystems," Economic Systems, Elsevier, vol. 47(3).
    8. Nadia von Jacobi & Vito Amendolagine, 2022. "What Feeds on What? Networks of Interdependencies between Culture and Institutions," Working Papers 11, SITES.
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    More about this item

    Keywords

    culture; redistribution; diversity;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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