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

Author

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  • Hansen, Kerstin F.

    (University of Basel)

  • Stutzer, Alois

    (University of Basel)

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.

Suggested Citation

  • Hansen, Kerstin F. & Stutzer, Alois, 2021. "Experiencing Booms and Busts in the Welfare State and Support for Redistribution," IZA Discussion Papers 14327, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14327
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    References listed on IDEAS

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    4. Maria Cotofan & Robert Dur & Stephan Meier, 2021. "Does growing up in a recession increase compassion? The case of attitudes towards immigration," CEP Discussion Papers dp1757, Centre for Economic Performance, LSE.
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    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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