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Culture, diversity, and the welfare state

Klaus Gründler and Sebastian Köllner

Journal of Comparative Economics, 2020, vol. 48, issue 4, 913-932

Abstract: We examine how cultural socialization and diversity influence welfare systems. Our sample includes 134 countries (1975-2014). We employ spatial patterns and biological characteristics as instrumental variables for culture. The results show that culture is an important predictor for the generosity of welfare states: welfare provision is higher in countries with loose family ties and individualistic attitudes, high prevalence of trust and tolerance, and low acceptance of unequally distributed power. These channels explain 20-50% of the cross-country variation in welfare provision. Cultural heterogeneity (diversity) influences redistribution non-linearly: moderate diversity levels impede redistribution, while higher levels offset the negative effect.

Keywords: Culture; Welfare State; Institutions; Redistribution; Diversity (search for similar items in EconPapers)
JEL-codes: H11 I38 Z1 D31 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:48:y:2020:i:4:p:913-932

DOI: 10.1016/j.jce.2020.05.003

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