All Displaced Workers Are Not Created Equal: The Political Economy of Worker Adjustment Assistance in France

David Gray

Public Choice, 1995, vol. 85, issue 3-4, 313-33

Abstract: This paper analyzes the political economy of adjustment assistance benefits paid to selected groups of displaced workers. Several competing theories of income redistribution are discussed, including social insurance motives and political support motives, a dichotomy laid out by Hillman (1988) and Baldwin (1989). The Becker (1983) hypothesis concerning the role of deadweight loss factors is addressed. Based on descriptive and empirical analysis of an original French data set, it is argued that the politico-economic characteristics that render an industry and its workforce more likely to receive these benefits are those associated with the Olson (1982) model of the logic of collective action. Some evidence is found, however, that social insurance factors play a partial role. The pattern of income redistribution does not appear to be strongly influenced by the deadweight loss factors that Becker stresses. Copyright 1995 by Kluwer Academic Publishers

Date: 1995
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