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Risks at work: the demand and supply sides of government redistribution

Author

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  • Cusack, Thomas R.
  • Iversen, Torben
  • Rehm, Philipp

Abstract

To understand how the welfare state adjusts to economic shocks it is important to explain both the genesis of popular preferences and the institutional incentives of governments to respond to these preferences. This paper attempts to do both, using a general theoretical framework and detailed data at both the individual and national levels. In a first step, we focus on how risk exposure and income are related to preferences for redistribution. To test our hypotheses, we extract detailed risk exposure measures from labor force surveys and marry them to cross-national survey data. In a second step, we turn our attention to the supply side of government redistribution. Institutions, we argue, mediate governments’ reactions to redistributional demands following economic shocks. Using time-series cross-country data, we demonstrate how national training systems, electoral institutions as well as government partisanship shape government responses.

Suggested Citation

  • Cusack, Thomas R. & Iversen, Torben & Rehm, Philipp, 2005. "Risks at work: the demand and supply sides of government redistribution," Discussion Papers, Research Unit: Institutions, States, Markets SP II 2005-15, WZB Berlin Social Science Center.
    • Handle: RePEc:zbw:wzbism:spii200515
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    References listed on IDEAS

    as
    1. Moene, Karl Ove & Wallerstein, Michael, 2001. "Inequality, Social Insurance, and Redistribution," American Political Science Review, Cambridge University Press, vol. 95(4), pages 859-874, December.
    2. Rehm, Philipp, 2005. "Citizen support for the Welfare State: Determinants of preferences for income redistribution," Discussion Papers, Research Unit: Institutions, States, Markets SP II 2005-02, WZB Berlin Social Science Center.
    3. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages 1-33, March.
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    Cited by:

    1. Leslie McCall & Lane Kenworthy, 2007. "Inequality, Public Opinion, and Redistribution," LIS Working papers 459, LIS Cross-National Data Center in Luxembourg.
    2. Debora Di Gioacchino & Laura Sabani, 2009. "The politics of social protection: social expenditure vs market regulation," International Review of Applied Economics, Taylor & Francis Journals, vol. 23(3), pages 387-404.
    3. Brady, David & Bostic, Amie, 2015. "Paradoxes of Social Policy: Welfare Transfers, Relative Poverty, and Redistribution Preferences," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 80(2), pages 268-298.
    4. Debora Di Gioacchino & Laura Sabani, 2009. "The Politics of Social Protection: Social Expenditure versus Markets' Regulation," Working Papers in Public Economics 116, Department of Economics and Law, Sapienza University of Roma.
    5. Schaffer, Lena Maria & Spilker, Gabriele, 2013. "Adding Another Level: Individual Responses to Globalization and Government Welfare Policies," Papers 551, World Trade Institute.

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    More about this item

    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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