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The analysis of welfare state effects on social trust in a multidimensional approach

Larysa Tamilina

No 2008-03, IRISS Working Paper Series from IRISS at CEPS/INSTEAD

Abstract: Crowding-out hypothesis asserts that in the presence of developed social obligations, social trust levels tend to be low. Empirical evidence of the crowding-out is however poor while this relationship is mainly studied under narrow assumption about unidimensionality of welfare state development operationalized through social spending as a percentage of GDP. The main objective of this study is to show that allowing for multidimensionality in welfare states provides more support for the crowding-out. The multidimensionality is formed around three axes: functional, outcome and qualitative. Functional dimension is defined on the basis of functions social policy performs taking as an example pension and unemployment spending. Outcome dimension accounts for the effects of decommodification and stratification on interpersonal and institutional trust. And, finally, qualitative dimension describes the impact of social provisions’ characteristics, namely their institutional design, delivery form and mode of financing on social trust levels. Empirical results generally support the idea that the sign in the relationship between welfare state and social trust depends on the measure of welfare state development.

Keywords: crowding-out; social trust; welfare state; multidimensionality; social benefits (search for similar items in EconPapers)
Pages: 36 pages
Date: 2008-02
New Economics Papers: this item is included in nep-soc
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