Hostname: page-component-76fb5796d-22dnz Total loading time: 0 Render date: 2024-04-25T20:38:18.933Z Has data issue: false hasContentIssue false
  • English
  • Français

How do Economic Circumstances Determine Preferences? Evidence from Long-run Panel Data

Published online by Cambridge University Press:  01 November 2017

Tom O’Grady
Get access Rights & Permissions [Opens in a new window]

Abstract

Preferences for redistribution and social spending are correlated with income and unemployment risk, but it is unclear how these relationships come about. I build a theory emphasizing that only large changes in economic circumstances provide the information and motivation needed for people to change their preferences. Stable long-run preferences are shaped mainly by early socialization, which includes economic and ideological influences from the family, and early labor market experiences. Enduring shocks, low intergenerational mobility and the tendency of left-wing parents to be poorer generate correlations between circumstances and preferences. Because preferences are stable, greater inequality may not increase aggregate support for redistribution. Support is found for the theory with panel data from Switzerland, using a range of empirical tests.

Keywords

redistributionsocial policypublic opinioncomparative political economy
Type
Articles
Information
British Journal of Political Science , Volume 49 , Issue 4 , October 2019 , pp. 1381 - 1406
Copyright
© Cambridge University Press 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

Department of Political Science, University College London, United Kingdom (Email: tom.d.ogrady@gmail.com). I wish to thank the editor, three anonymous reviewers, Ben Ansell, Adam Berinsky, Charlotte Cavaille, Tom Cusack, Jeremy Ferwerda, Jens Hainmueller, Torben Iversen, Dan de Kadt, Dean Knox, Stephanie Rickard, David Singer, Kathy Thelen and Teppei Yamamoto for useful suggestions and comments. This study uses data collected by the Swiss Household Panel (SHP), which is based at the Swiss Centre of Expertise in the Social Sciences (FORS). The SHP is financed by the Swiss National Science Foundation. The data are available for free download from FORS with a data use contract, which can be obtained at http://forscenter.ch/en/our-surveys/swiss-household-panel. Data replication sets are available in Harvard Dataverse at: https://dx.doi.org/10.7910/DVN/IEX6BE and online appendices at: https://doi.org/10.1017/S0007123417000242.

References

Aaroe, Lene, and Petersen, Michael B.. 2014. Crowding Out Culture: Scandinavians and Americans Agree on Social Welfare in the Face of Deservingness Cues. Journal of Politics 76 (3):684–697.Google Scholar
Alesina, Alberto, and Glaeser, Edward. 2005. Fighting Poverty in the US and Europe: A World of Difference. Oxford: Oxford University Press.Google Scholar
Alesina, Alberto, and La-Ferrara, Eliana. 2005. Preferences for Redistribution in the Land of Opportunity. Journal of Public Economics 89 (3):897–931.Google Scholar
Allison, Paul. 2009. Fixed Effects Regression Models, Quantitative Applications in the Social Sciences Series no. 160. Thousand Oaks, CA: Sage Publications.Google Scholar
Alwin, Duane F., and Krosnick, Jon A.. 1991. Aging, Cohorts, and the Stability of Sociopolitical Orientations over the Life Span. American Journal of Sociology 97 (1):169–195.Google Scholar
Armingeon, Klaus. 2005. Institutionalizing the Swiss Welfare State. West European Politics 24 (2):145–168.Google Scholar
Barber, Benjamin, Beramendi, Pablo, and Wibbels, Erik. 2013. The Behavioral Foundations of Social Politics: Evidence from Surveys and a Laboratory Democracy. Comparative Political Studies 46 (10):1155–1189.Google Scholar
Blekesaune, Morten. 2006. Economic Conditions and Public Attitudes to Welfare Policies. European Sociological Review 23 (3):393–403.Google Scholar
Borjas, George. 2003. The Labor Demand Curve Is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market. Quarterly Journal of Economics 118 (4):1335–1374.Google Scholar
Browning, Martin, and Crossley, Thomas F.. 2001. The Life-Cycle Model of Consumption and Saving. Journal of Economic Perspectives 15 (3):3–22.Google Scholar
Campbell, Andrea. 2002. Self-Interest, Social Security, and the Distinctive Participation Patterns of Senior Citizens. American Political Science Review 96 (3):565–574.Google Scholar
Cavaille, Charlotte, and Trump, Kris-Stella. 2015. The Two Facets of Social Policy Preferences. Journal of Politics 77 (1):146–160.Google Scholar
Chong, Dennis, Citrin, Jack, and Conley, Patricia. 2001. When Self-Interest Matters. Political Psychology 22 (3):541–570.Google Scholar
Corneo, Giacomo, and Gruner, Hans-Peter. 2002. Individual Preferences for Political Redistribution. Journal of Public Economics 83 (1):83–107.Google Scholar
Cusack, Tom, Iversen, Torben, and Rehm, Philipp. 2006. Risks at Work: The Demand and Supply Sides of Government Redistribution. Oxford Review of Economic Policy 22 (3):365–389.Google Scholar
Dinas, Elias. 2013. Opening ‘Openness to Change’: Political Events and the Increased Sensitivity of Young Adults. Political Research Quarterly 66 (4):868–882.Google Scholar
Feldman, Stanley. 2003. Values, Ideology and the Structure of Political Attitudes. Pp. 477--508 in Oxford Handbook of Political Psychology, edited by D. Sears, L. Huddy and R. Jervis. Oxford: Oxford University Press.Google Scholar
Feldman, Stanley, and Steenbergen, Marco. 2001. The Humanitarian Foundation of Support for Social Welfare. American Journal of Political Science 45 (3):658–677.Google Scholar
Finseraas, Henning. 2009. Income Inequality and Demand for Redistribution: A Multilevel Analysis of European Public Opinion. European Sociological Review 32 (1):94–119.Google Scholar
Finseraas, Henning. 2017. The Effect of a Booming Local Economy in Early Childhood on the Propensity to Vote: Evidence from a Natural Experiment. British Journal of Political Science 47 (3):609–629.Google Scholar
Georgiadis, Andreas, and Manning, Alan. 2012. Spend it Like Beckham: Inequality and Redistribution in the UK, 1983–2004. Public Choice 151 (3):537–563.Google Scholar
Giuliano, Paola, and Spilimbergo, Antonio. 2014. Growing up in a Recession. Review of Economic Studies 81 (2):787–817.Google Scholar
Green, Donald, and Gerken, Ann-Elizabeth. 1989. Self-Interest and Public Opinion Toward Smoking Restrictions and Cigarette Taxes. Public Opinion Quarterly 53 (1):1–16.Google Scholar
Gregg, Paul, and Tominey, Emma. 2005. The Wage Scar from Male Youth Unemployment. Labour Economics 12 (4):487–509.Google Scholar
Hainmueller, Jens, and Hiscox, Michael J.. 2010. Attitudes toward Highly Skilled and Low Skilled Immigration: Evidence from a Survey Experiment. American Political Science Review 104 (01):61–84.Google Scholar
Iversen, Torben, and Soskice, David. 2001. An Asset Theory of Social Policy Preferences. American Political Science Review 95 (4):875–893.Google Scholar
Jenkins, Stephen P. 2000. Modelling Household Income Dynamics. Journal of Population Economics 13 (4):529–567.Google Scholar
Jennings, M. Kent, and Markus, Gregory B.. 1984. Partisan Orientations over the Long Haul: Results from the Three-Wave Political Socialization Panel Study. American Political Science Review 78 (4):1000–1018.Google Scholar
Jennings, M. Kent, Stoker, Laura, and Bowers, Jake. 2009. Politics across Generations: Family Transmission Reexamined. Journal of Politics 71 (3):782–799.Google Scholar
Kahn, Lisa. 2010. The Long-Term Labor-Market Consequences of Graduating from College in a Bad Economy. Labour Economics 17 (2):303–316.Google Scholar
Kelly, Nathan J., and Enns, Peter K.. 2010. Inequality and the Dynamics of Public Opinion: The Self-Reinforcing Link between Economic Inequality and Mass Preferences. American Journal of Political Science 54 (4):855–870.Google Scholar
Kuklinski, James H., Quirk, Paul J., Jerit, Jennifer, and Rich, Robert F.. 2001. The Political Environment and Citizen Competence. American Journal of Political Science 45 (2):410–424.Google Scholar
Lane, Jan-Erik, and Maeland, Reinert. 2001. The Growth of the Public Sector in Switzerland. West European Politics 24 (2):169–190.Google Scholar
Luttmer, Erzo F. P., and Singhal, Monica. 2011. Culture, Context, and the Taste for Redistribution. American Economic Journal: Economic Policy 3 (1):157–179.Google Scholar
McCall, Leslie, and Kenworthy, Lane. 2008. Inequality, Public Opinion, and Redistribution. Socio-Economic Review 6 (1):35–68.Google Scholar
Margalit, Yotam. 2013. Explaining Social Policy Preferences: Evidence from the Great Recession. American Political Science Review 107 (1):80–103.Google Scholar
Meltzer, Allan H., and Richard, Scott F.. 1981. A Rational Theory of the Size of Government. Journal of Political Economy 89 (5):914–927.Google Scholar
Moene, Karl Ove, and Wallerstein, Michael. 2001. Inequality, Social Insurance and Redistribution. American Political Science Review 95 (4):859–874.Google Scholar
Mroz, Thomas, and Savage, Timothy. 2006. The Long-Term Effects of Youth Unemployment. Journal of Human Resources 41 (2):259–293.Google Scholar
Neundorf, Anja, Smets, Kaat, and Garcia-Albacete, Gema. 2013. Homemade Citizens: The Development of Political Interest During Adolescence and Young Adulthood. Acta Politica 48 (1):92–116.Google Scholar
Obinger, Herbert, Starke, Peter, Moser, Julia, Bodegan, Claudia, Gindulis, Edith, and Liebfried., Stephan 2010. Transformations of the Welfare State: Small States, Big Lessons. Oxford: Oxford University Press.Google Scholar
O’Grady, Tom. 2017. “Replication Code for: How do Economic Circumstances Determine Preferences? Evidence from Long-run Panel Data”, https://dx.doi.org/doi:10.7910/DVN/IEX6BE, Harvard Dataverse, V1.Google Scholar
Oreopoulos, Philip, Wachter, Til Von, and Heisz, Andrew. 2012. The Short- and Long-Term Career Effects of Graduating in a Recession. American Economic Journal: Applied Economics 4 (1):1–29.Google Scholar
Prior, Markus. 2010. You’ve Either Got it or You Don’t: The Stability of Political Interest over the Life Cycle. Journal of Politics 72 (3):747–766.Google Scholar
Rehm, Philipp. 2009. Risks and Redistribution: An Individual-Level Analysis. Comparative Political Studies 42 (7):855–881.Google Scholar
Rehm, Philipp. 2011. Social Policy by Popular Demand. World Politics 63 (02):271–299.Google Scholar
Rehm, Philipp, Hacker, Jacob S., and Schlesinger, Mark. 2012. Insecure Alliances: Risk, Inequality, and Support for the Welfare State. American Political Science Review 106 (2):386–406.Google Scholar
Rehm, Philipp, Hacker, Jacob S., and Schlesinger, Mark. 2013. The Insecure American: Economic Experiences, Financial Worries, and Policy Attitudes. Perspectives on Politics 11 (1):23–49.Google Scholar
Sears, David O., and Funk, Carolyn L.. 1990. The Limited Effect of Economic Self-Interest on the Political Attitudes of the Mass Public. Journal of Behavioral Economics 19 (3):247–271.Google Scholar
Sears, David O., and Funk, Carolyn L.. 1999. Evidence of the Long-Term Persistence of Adults’ Political Predispositions. Journal of Politics 61 (1):1–28.Google Scholar
Sears, David O., Lau, Richard R., Tyler, Tom R., and Allen, Harris M.. 1980. Self-Interest vs. Symbolic Politics in Policy Attitudes and Presidential Voting. American Political Science Review 74 (3):670–684.Google Scholar
Simon, Herbert. 1982. Models of Bounded Rationality. Cambridge, MA: MIT Press.Google Scholar
Soroka, Stuart, and Wlezien, Christopher. 2005. Opinion-Policy Dynamics: Public Preferences and Public Expenditure in the United Kingdom. British Journal of Political Science 35 (4):665–689.Google Scholar
Stegmueller, Daniel. 2011. Apples and Oranges? The Problem of Equivalence in Comparative Research. Political Analysis 19 (4):471–487.Google Scholar
Stegmueller, Daniel. 2013. Modeling Dynamic Preferences: A Bayesian Robust Dynamic Latent Ordered Probit Model. Political Analysis 21 (3):314–333.Google Scholar
Stevenson, Randolph. 2001. The Economy and Policy Mood: A Fundamental Dynamic of Democratic Politics? American Journal of Political Science 45 (3):620–633.Google Scholar
Svallfors, Stefan. 2003. Welfare Regimes and Welfare Opinions: A Comparison of Eight Western Countries. Social Indicators Research 64:495–520.Google Scholar
Tversky, Amos, and Kahneman, Daniel. 1974. Judgement Under Uncertainty: Heuristics and Biases. Science 185 (4157):1124–1131.Google Scholar
Van Oorschot, Wim. 2006. Making the Difference in Social Europe: Deservingness Perceptions among Citizens of European Welfare States. Journal of European Social Policy 16 (1):23–42.Google Scholar
Supplementary material: Link

O’Grady Dataset

Dataset

https://dx.doi.org/10.7910/DVN/IEX6BE
Link
Supplementary material: PDF

O’Grady supplementary material

Figures S1-S5 and Tables S1-S7

Download O’Grady supplementary material(PDF)
PDF 161 KB