“Demand for Redistribution: Individuals’ Response to Economic Setbacks” – New Working Paper by 4Is Researcher Linna Martén

With ongoing fiscal retrenchment, it is important to understand the consequences of welfare reform for the most vulnerable members of society. Therefore the 4Is project takes a look at how the welfare state protects households from adverse shocks, as well as how it affects the relationship between material circumstances and well-being. The Project assesses the role of past changes in policy and in the socio-demographic and labour market conditions in explaining recent changes in income inequality and evaluates the ability of current welfare states to reduce inequalities in the future, measuring not only income inequality at a point in time, but also income mobility through the lifetime and between generations.

The latest working paper contribution by Linne Marten deals with the “Demand for Redistribution: Individuals’ Response to Economic Setbacks”

Abstract

Although economic circumstances have been argued to be a major determining factor of attitudes to redistribution, there is little well identified evidence at the individual level. Utilizing a unique dataset, with detailed individual information, provides new and convincing evidence on the link between economic circumstances and demand for redistribution (in the form of benefits and support). The Swedish National Election Studies are constructed as a rotating survey panel, which makes it possible to estimate the causal e_ect of economic changes. The empirical analysis shows that individuals who experience a job loss become considerably more supportive of redistribution. Yet, attitudes to redistribution return to their initial level as economic prospects improve, suggesting that the effect is only temporary. Despite the fact that a job loss also changes attitudes to the political parties, the probability to vote for the left-wing is not affected.