Philipp Rehm

Risks and Redistribution An Individual-Level Analysis

Much of the disagreement in the debate about globalization and its present or absent effects on the welfare state stems from competing assumptions about the individual-level determinants of redistributional preferences. This article calls for and provides testing of these causal mechanisms at the individual level. Traditional accounts suggest that risks at the industry level are important determinants of redistributional preferences. This article argues that risks at the occupational level should also be considered. A comprehensive new data set is used to test whether and what types of risks in the labor market play an important role in shaping preferences. Statistical analyses of public opinion surveys (European Social Survey) show strong evidence for the assumed causal mechanism. Contrary to much of the literature, but in line with this articles claims, it is the occupational, rather than the industry level, that is most important. The article lays out implications of these findings.

Insecure Alliances: Risk, inequality, and support for the Welfare State

Popular support for the welfare state varies greatly across nations and policy domains. We argue that these variations—vital to understanding the politics of the welfare state—reflect in part the degree to which economic disadvantage (low income) and economic insecurity (high risk) are correlated. When the disadvantaged and insecure are mostly one and the same, the base of popular support for the welfare state is narrow. When the disadvantaged and insecure represent two distinct groups, popular support is broader and opinion less polarized. We test these predictions both across nations within a single policy area (unemployment insurance) and across policy domains within a single polity (the United States, using a new survey). Results are consistent with our predictions and are robust to myriad controls and specifications. When disadvantage and insecurity are more correlated, the welfare state is more contested.

Social Policy by Popular Demand

Why are unemployment benefits more generous in some countries? This article argues that citizens trade off the redistributive and insuring effect of social insurance. As a result, the distribution of risk in a society has important consequences via popular demand for social policy-making. At the microlevel, the article shows that, in addition to income, the risk of unemployment is a key predictor of individual-level preferences for unemployment benefits. Based on the microlevel findings, the article argues that at the macrolevel the homogeneity of the risk pool is an important determinant of benefit generosity: the more equally unemployment risk is distributed, the higher unemployment replacement rates are. Empirical testing at both levels finds support for this account of social policy by popular demand.

Risk Inequality and the Polarized American Electorate

Why has the American political landscape grown more partisan since the 1970s? This article provides a novel account of the determinants of partisanship. The author argues that partisanship is not only shaped by the traditionally suggested socio-economic factors, but also by the uncertainty of future income (risk exposure): rich individuals facing a high degree of risk exposure (or poor people facing low risk exposure) are ‘cross-pressured’; while their income suggests that they should identify with the Republicans, their income prospects make them sympathize with the Democrats. These two traits have overlapped increasingly since the 1970s. Those with lower incomes tend to be also those with higher risk exposure (risk inequality increased). This has led to a sorting of the American electorate: more citizens have become ‘natural’ partisans.

Occupations as a Site of Political Preference Formation

Political preferences are multi-dimensional, covering topics like redistribution, immigration, and abortion. But what accounts for people’s political preferences? We argue that an individual’s work experiences on the job play an important part in shaping attitudes. In a process of generalization and transposition, people apply the kinds of reasoning, heuristics, and problem-solving techniques they learn and use at work in all realms of life. In this article, we briefly discuss the dimensionality of the political preference space and then explicate our account that links work experiences with attitudes. We use European Social Survey data to establish correlations between work experiences and attitudes and find evidence that is consistent with our account.

Citizen Support for the Welfare State: Determinants of Preferences for Income Redistribution

This paper explores the determinants of individual level support for income redistribution by the government. It argues that there are two sources of preference formation when it comes to redistribution. People are either in favor of income redistribution because they are disadvantaged, or they favor redistribution as a means to insure against income shocks. The paper explores both logics, but focuses on the latter. Four risk factors are hypothesizes to influence an individual’s preferences over income redistribution: a) structural change; b) exposure to international competition; c) specificity of skills; and d) occupational unemployment. Some of these measures are novel. The paper relies on the European Social Survey 2002/2003 in order to test the formulated hypotheses. The results show that a) skill specificity and occupational unemployment are important determinants of individual preferences over redistribution whereas b) structural change and exposure to international competition are not.

Who Gives, Who Gains? Progressivity and Preferences

The extent to which popular support for the welfare state depends on income varies greatly across nations and policy domains. We argue and show formally that these variations—largely overlooked yet essential to understanding the politics of redistribution—reflect in part the design of tax and transfer policies in terms of progressivity. When progressivity is high, politics is perceived by income groups as a zero sum game and conflicts over who gets what intensify. When progressivity is low, and tax contributors and benefit recipients overlap, redistributive struggles become politically less salient. We test these predictions both across nations and across policy domains within a sample of advanced industrial democracies. Our findings indicate that the progressivity of the tax and transfer system is a major determinant of the predictive power of income on preferences for redistribution.

Income Risk in 30 Countries

We present a measure of income risk that decomposes income dynamics into long-run inequality, volatility (inter-temporal variability around individual-specific growth rates), and mobility risk (variation in individual-specific growth rates). We measure these income risk components in panel data from 30 rich democracies. We use this comprehensive collection of panel data to analyze long-terms trends in income dynamics for four countries (Canada, Germany, Great Britain, and the United States), and cross-national patterns of income dynamics for an additional 26 countries. We find that tax and transfer systems lower income risk, but less so in the United States than in other comparable countries. We find that higher incomes tend to grow faster and to be more volatile than lower incomes. We find that the United States is exceptional in its level of, and increase in, each type of income risk. Various other measures of mobility are positively correlated with mobility risk.