Income mobility and support for the welfare state: Panel evidence from Germany

Bilal El Rafhi ()
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Bilal El Rafhi: University Paris 8

Economics Bulletin, 2026, vol. 46, issue 3, 1214 - 1236

Abstract: Previous studies on preferences for state intervention have primarily relied on cross-sectional designs, which are limited in their ability to account for time-invariant unobservables. Using panel data from the 1997–2002 German SOEP, we estimate first-difference models to assess whether medium-term income changes are associated with changes in support for public versus private provision across five domains of financial security. A one-log-point rise in real household income is associated with a decline in support for state involvement in family, unemployment, sickness, old-age, and long-term care provision by 7-11% of a scale point. Two patterns of heterogeneity emerge: (i) individuals in the bottom or top 1997 income quintile react almost twice as strongly as those in the middle ; (ii) the absolute response to income gains exceeds that to losses (p

Keywords: Welfare-state preferences, Income mobility, Redistribution, Panel data; Germany. (search for similar items in EconPapers)
JEL-codes: D3 H5 (search for similar items in EconPapers)
Date: 2026-09-30
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