Is the Welfare State Sustainable? Experimental Evidence on Citizens' Preferences for Redistribution
38 Pages Posted: 12 Aug 2010
There are 2 versions of this paper
Is the Welfare State Sustainable? Experimental Evidence on Citizens' Preferences for Redistribution
Is the Welfare State Sustainable? Experimental Evidence on Citizens' Preferences for Redistribution
Date Written: August 11, 2010
Abstract
The sustainability of the welfare state ultimately depends on citizens’ preferences for income redistribution. They are elicited through a Discrete Choice Experiment performed in 2008 in Switzerland. Attributes are redistribution as GDP share, its uses (the unemployed, old-age pensioners, people with ill health etc.), and nationality of beneficiary. Estimated marginal willingness to pay (WTP) is positive among those who deem benefits too low, and negative otherwise. However, even those who state that government should reduce income inequality exhibit a negative WTP on average. The major finding is that estimated average WTP is maximum at 21% of GDP, clearly below the current value of 25%. Thus, the present Swiss welfare state does not appear sustainable.
Keywords: Income Redistribution, Welfare State, Sustainability, Preferences, Willingness to Pay, Discrete Choice Experiments
JEL Classification: C35, C93, D63, H29
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Preferences for Redistribution
By Alberto F. Alesina and Paola Giuliano
-
Preferences for Redistribution
By Alberto F. Alesina and Paola Giuliano
-
Preferences for Redistribution
By Alberto F. Alesina and Paola Giuliano
-
Social Mobility and the Demand for Redistribution: the Poum Hypothesis
By Roland Bénabou and Efe A. Ok
-
Why Doesn't the Us Have a European-Style Welfare State?
By Alberto F. Alesina, Edward L. Glaeser, ...
-
Belief in a Just World and Redistributive Politics
By Roland Bénabou and Jean Tirole