Let's talk about the Welfare State: Redistribution Preferences and the Role of Social Institutions

Abstract

Let’s talk about the Welfare State: Redistribution Preferences and the Role of Social Institutions is a book project which builds on findings from my dissertation thesis. The guiding question is how the institutional context influences people’s choices and preferences. Part I expands the analysis of institutional dynamics and redistribution attitudes. In my dissertation project, I generate a benefit concentration index based on unemployment benefit microsimulations (life-cycle redistribution). I employ a similar simulation approach to estimate tax progressivity, and complement the institutional indicators with the distribution of unemployment risk across countries. Part II is devoted to the interaction between people’s preferences and the institutional context. Whether social benefits are governed by a flat-rate or an earnings-related principle raises further questions on fairness perspectives and on the role that luck or merit should have on individual incomes. One major goal with this book project is to explore people’s perspective on what the aim of social insurance should be. I ask whether there is systematic variation in the distribution of different perspectives across countries, and how this relates to the institutional and risk dimensions that I capture in Part I. I do so with online experiments which target a broader population. In part III, I elaborate on the interaction between two dimensions. One dimension is the source of income, luck or merit, the other dimension is the institutional arrangement of life-cycle redistribution, earnings-related or flat-rate. In the final part of the book, I therefore explore whether people’s institutional choice is systematically influences by variation in the source of inequality.

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