Preferences for social protection: Theory and empirics

Debora Di Gioacchino, Laura Sabani and Simone Tedeschi

Economic Modelling, 2014, vol. 36, issue C, 629-644

Abstract: Empirical cross-country evidence suggests that countries position themselves along a sort of Market Regulation (MR)-Social Expenditure (SE) trade-off “line”. Theoretically, it is clear that there exists a certain degree of substitutability between SE and MR, since both can provide a cushion against socio-economic risks. However, market regulation is an inefficient means to provide protection, since it might reduce productivity and the employment level. Still, to be politically viable efficiency-enhancing deregulation policies must come along with appropriate fiscal measures (social protection spending) to compensate the losers of reforms or to accommodate any temporary negative effect on aggregate demand. This implies that the political determinants of MR and SE should be jointly analyzed to explain both the multiplicity of stable combinations of MR and SE empirically observed, and the strong political resistance often encountered in the implementation of structural reforms. The focus of this paper is a theoretical and empirical (using microdata from the International Social Survey Programme (ISSP)) investigation on the socio-economic, institutional and cultural factors which shape voters' preferences for MR and SE and determine the relative salience of the two political issues. Such an analysis should provide fundamental pieces of information to carry out a proper analysis of the political process to give account of the multiplicity of combinations of MR and SE empirically observed.

Keywords: Social protection; Market regulation; Unemployment benefits; Redistribution; Political preferences (search for similar items in EconPapers)
JEL-codes: D31 D72 H53 J65 L51 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:36:y:2014:i:c:p:629-644

DOI: 10.1016/j.econmod.2013.09.055

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