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

Kerstin F. Hansen () and Alois Stutzer
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Kerstin F. Hansen: University of Basel

No 14327, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: macroeconomic experiences; impressionable years; support for redistribution; unemployment; unemployment insurance (search for similar items in EconPapers)
JEL-codes: E60 J65 P16 P48 Z13 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2021-04
New Economics Papers: this item is included in nep-ias, nep-lab and nep-mac
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Citations: View citations in EconPapers (9)

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