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The Political Economy of Compensatory Redistribution: Unemployment, inequality and policy choice

Author

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  • Jonas Pontusson

    (UNIGE - Université de Genève = University of Geneva)

  • David Weisstanner

    (UNIBE - Universität Bern / University of Bern)

Abstract

This paper explores common trends in inequality and redistribution across OECD countries from the late 1980s to 2013. Low-end inequality rises during economic downturns while rising top-end inequality is associated with economic growth. Most countries retreated from redistribution from the mid-1990s until the onset of the Great Recession and compensatory redistribution in response to rising unemployment was weaker in 2008-13 than in the first half of the 1990s. As unemployment and poverty risk became increasingly concentrated among workers with low education, middle-income opinion has become more permissive of cuts in unemployment insurance generosity and income assistance to the poor. At constant generosity, the expansion of more precarious forms of employment reduces compensatory redistribution during downturns because temporary employees do not have the same access to unemployment benefits as permanent employees.

Suggested Citation

  • Jonas Pontusson & David Weisstanner, 2016. "The Political Economy of Compensatory Redistribution: Unemployment, inequality and policy choice," Working Papers hal-03469899, HAL.
    • Handle: RePEc:hal:wpaper:hal-03469899
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03469899
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    References listed on IDEAS

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    1. Rehm, Philipp & Hacker, Jacob S. & Schlesinger, Mark, 2012. "Insecure Alliances: Risk, Inequality, and Support for the Welfare State," American Political Science Review, Cambridge University Press, vol. 106(2), pages 386-406, May.
    2. Bruno Palier & Kathleen Thelen, 2010. "Institutionalizing Dualism: Complementarities and Change in France and Germany," Politics & Society, , vol. 38(1), pages 119-148, March.
    3. Martin Gilens, 2014. "Affluence and Influence: Economic Inequality and Political Power in America," Economics Books, Princeton University Press, edition 1, number 9836.
    4. Lane Kenworthy & Jonas Pontusson, 2005. "Rising Inequality and the Politics of Redistribution in Affluent Countries," LIS Working papers 400, LIS Cross-National Data Center in Luxembourg.
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    Cited by:

    1. Luis Buendía & Pedro José Gómez Serrano & Ricardo Molero-Simarro, 2020. "Gone with the Crisis? Welfare State Change in Europe Before and Since the 2008 Crisis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(1), pages 243-264, July.
    2. Theo Bodin & Nuria Matilla-Santander & Jenny Selander & Per Gustavsson & Tomas Hemmingsson & Gun Johansson & Johanna Jonsson & Katarina Kjellberg & Bertina Kreshpaj & Cecilia Orellana & Eskil Wadensjö, 2022. "Trends in Precarious Employment in Sweden 1992–2017: A Social Determinant of Health," IJERPH, MDPI, vol. 19(19), pages 1-13, October.
    3. Florent Bordot & Andre Lorentz, 2021. "Automation and labor market polarization in an evolutionary model with heterogeneous workers," LEM Papers Series 2021/32, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

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