Abstract
In this article, we show that it is crucial to distinguish between liquid and illiquid wealth to understand how voters form preferences toward social insurance. Many households are financially fragile despite having high incomes and wealth, because they hold little liquid savings. We hypothesize, and show empirically, that this implies that a substantial group of voters show strong support for social insurance policies despite being wealthy and having high incomes, because of their limited ability to self-insure through own savings in case of an income shock. Our empirical analysis is based on a novel dataset from Denmark, which combines administrative data with high-quality measures of individual financial assets and survey measures of political preferences. Using data for other countries from the European Social Survey, we find evidence that our results hold more generally and are not specific to the Danish context.
| Originalsprog | Engelsk |
|---|---|
| Tidsskrift | Comparative Political Studies |
| Vol/bind | 53 |
| Udgave nummer | 6 |
| Sider (fra-til) | 892-922 |
| ISSN | 0010-4140 |
| DOI | |
| Status | Udgivet - 1 maj 2020 |
Finansiering
Hariri Jacob Gerner 1 Jensen Amalie Sofie 2 https://orcid.org/0000-0002-4368-9851 Lassen David Dreyer 1 1 University of Copenhagen, Denmark 2 Princeton University, Princeon, NJ, USA David Dreyer Lassen, Department of Economics and CEBI, University of Copenhagen, Øster Farimagsgade 5, 1353 Copenhagen, Denmark. Email: [email protected] 10 2019 0010414019879718 © The Author(s) 2019 2019 SAGE Publications In this article, we show that it is crucial to distinguish between liquid and illiquid wealth to understand how voters form preferences toward social insurance. Many households are financially fragile despite having high incomes and wealth, because they hold little liquid savings. We hypothesize, and show empirically, that this implies that a substantial group of voters show strong support for social insurance policies despite being wealthy and having high incomes, because of their limited ability to self-insure through own savings in case of an income shock. Our empirical analysis is based on a novel dataset from Denmark, which combines administrative data with high-quality measures of individual financial assets and survey measures of political preferences. Using data for other countries from the European Social Survey, we find evidence that our results hold more generally and are not specific to the Danish context. political economy social welfare programs public opinion Samfund og Erhverv, Det Frie Forskningsråd https://doi.org/10.13039/100008395 N/A Danmarks Grundforskningsfond https://doi.org/10.13039/501100001732 Center for Economic Behavior and Inequality FP7 Ideas: European Research Council https://doi.org/10.13039/100011199 313673 edited-state corrected-proof We thank Jim Alt, Torben Iversen, Søren Leth-Petersen, Andreas Wiedemann, referees, and conference and seminar participants at EPSA, APSA, Harvard, Bergen, University College London, and the DPCW for comments. We gratefully acknowledge financial support from the Sapere Aude program under the Danish Independent Research Fund for the project “Hard Times, Hard Choices” and from an ERC Starting Grant (Project No. 313673). The activities of CEBI are financed through a grant from the Danish National Research Foundation. Declaration of Conflicting Interests The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article. Funding The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: We gratefully acknowledge financial support from the Sapere Aude program under the Danish Independent Research Fund for the project “Hard Times, Hard Choices” and from an ERC Starting Grant (Project No. 313673). The activities of CEBI are financed through a grant from the Danish National Research Foundation. ORCID iD David Dreyer Lassen https://orcid.org/0000-0002-4368-9851 Supplemental Material Supplementary material for this article is available online at the CPS website http://journals.sagepub.com/doi/suppl/10.1177/0010414019879718
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