EconPapers    
Economics at your fingertips  
 

Does the Rise of China Lead to the Fall of European Welfare States?

Erling Barth, Henning Finseraas, Anders Kjelsrud and Karl Ove Moene
Additional contact information
Henning Finseraas: Norwegian Social Research

Authors registered in the RePEc Author Service: Bard Harstad

Working Papers from Oslo Metropolitan University, Oslo Business School

Abstract: Have recent trends in globalization changed the positive link between trade openness and social insurance? The consensus view - that voters want better social insurance against income loss the more open the economy - is seemingly contested by the rise of populism and the China shock. We present a theoretical framework of risk and income effects of globalization that captures the conventional view, but also shows when it will be modified: When the income effect is negative, the political support for social insurance can decline in spite of the risk effect. We construct an empirical measure of welfare state support across European regions and leverage the rapid integration of China into the world economy to show that higher import competition reduces the support for social insurance. Consistent with our framework, we decompose the overall effect of the shock into a (weak) positive risk effect and a (strong) negative income effect.

JEL-codes: F16 F6 H55 J21 J23 (search for similar items in EconPapers)
Date: 2021-02-01
New Economics Papers: this item is included in nep-com and nep-mic
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://doi.org/10.2139/ssrn.3775968 (text/html)

Related works:
Working Paper: Does the Rise of China Lead to the Fall of European Welfare States? (2021) Downloads
Working Paper: Does the Rise of China Lead to the Fall of European Welfare States? (2021) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oml:wpaper:202007

DOI: 10.2139/ssrn.3775968

Access Statistics for this paper

More papers in Working Papers from Oslo Metropolitan University, Oslo Business School Contact information at EDIRC.
Bibliographic data for series maintained by Eirik Hanssen ().

 
Page updated 2025-03-31
Handle: RePEc:oml:wpaper:202007