Coping with the Crisis: Public Safety Nets and Reliance on Government in the Wake of the Global Economic Crisis of 2008-2009

32 Pages Posted: 28 Aug 2015

See all articles by John E. Anderson

John E. Anderson

University of Nebraska at Lincoln - Department of Economics; Lincoln Institute of Land Policy

Shafiun Shimul

University of Nebraska at Lincoln

Date Written: April 8, 2015

Abstract

This paper examines how people in transition countries coped with the impacts of the global economic and financial crisis of 2008-2009. The data indicate that households in these countries were hit harder than those in other regions of the world. We consider how transition country households coped with the difficult circumstances, how their government social safety nets performed, and how the experience has affected their views on redistribution. The first research question examined is the performance of public safety nets in transition countries during the global economic crisis, estimating models explaining which citizens relied on specific safety net programs, including unemployment benefits, housing support, child support, and targeted social assistance programs. We also tackle the question of whether residents of transition countries have a strong taste for income redistribution via taxation as a form of insurance. We explicitly test the whether the possibility of upward mobility (POUM) hypothesis holds. Data used in this study are from the European Bank for Reconstruction and Development (EBRD) Life in Transition Survey (LITS I and LITS II for the years 2006 and 2010, respectively).

Keywords: global economic crisis, transition economies, safety nets, trust in government, desire for redistribution, possibility of upward mobility (POUM) hypothesis

JEL Classification: E21, H11, H31, H53, I38, P27

Suggested Citation

Anderson, John E. and Shimul, Shafiun, Coping with the Crisis: Public Safety Nets and Reliance on Government in the Wake of the Global Economic Crisis of 2008-2009 (April 8, 2015). Available at SSRN: https://ssrn.com/abstract=2652260 or http://dx.doi.org/10.2139/ssrn.2652260

John E. Anderson (Contact Author)

University of Nebraska at Lincoln - Department of Economics ( email )

Lincoln, NE 68588-0489
United States
402-472-1190 (Phone)
402-472-9700 (Fax)

Lincoln Institute of Land Policy ( email )

113 Brattle Street
Cambridge, MA 02138-3400
United States

Shafiun Shimul

University of Nebraska at Lincoln ( email )

730 N. 14th Street
Lincoln, NE 68588
United States

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