Dependency Status and Demand for Social Insurance: Evidence from Experiments and Surveys

Abstract

Current thinking on the origins and size of the welfare state often ignores household relations in which people may depend on others for income or have dependents themselves. The influence of "dependency status" on individuals' political preferences is unknown. We report results from a laboratory experiment designed to estimate the effect of dependency on preferences for policies that insure against labor market risk. Results indicate that 1) willingness to vote in favor of a social insurance policy is highly responsive to unemployment risk, 2) symmetric, mutual dependence is unrelated to support for insurance, but 3) asymmetric dependence (being dependent on someone else) increases support for social insurance. We connect our lab results to observational survey data and find similar relationships.For over a decade now our thinking on the political economy of the welfare state has focused on labor market risks and social insurance policy (Hall and Soskice, 2001;Iversen and Soskice, 2001; Wallerstein, 2001, 2003). Citizens' preferences over various social insurance policies (unemployment, disability, retirement, etc.) are held to be a function of the

Perceptions of Program Abuse and Support for Social Insurance

“…First, scholars have used incentivized experiments specifically to study support for social insurance. Generally, participants earn income by completing a real effort task and subsequently vote on a tax rate to finance a social insurance program (e.g., Barber et al, 2013) or whether social insurance should be provided (Ahlquist et al, 2017). Generally, these experiments have found that participants who are exposed to a higher risk of losing their income are more supportive of social insurance.…”

Unemployment Insurance, Risk, and the Acquisition of Specific Skills: An Experimental Approach

“…The Varieties of Capitalism framework has provoked a spate of empirical studies around social insurance and skills. Most of these have focused on evaluating the relationship between workers' skills and survey based measures of support for social insurance and redistribution (Ahlquist, Hamman and Jones, 2017;Cusak, Iversen and Rehm, 2006;Gingrich and Ansell, 2012;Iversen and Rhem, 2022;Nickelsburg and Timmons, 2012;Rehm, 2009Rehm, , 2011Sjöberg, 2008;Timmons and Nickelsburg, 2014). These studies face a series of empirical and conceptual challenges.…”

“…300ECU:£1 in the lab and 600ECU:$1 on mTurk.15 On the slider task, see Prowse (2011, 2012). SeeAhlquist, Hamman and Jones (2017) for a recent application of this real effort task in the context of social insurance programs.…”