a1 Ohio State University, Email: [email protected]
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.
(Online publication April 07 2011)
Philipp Rehm is an assistant professor of political science at Ohio State University. His work is located at the intersection of political economy and political behavior. He explores the causes and consequences of income dynamics (such as income loss, income volatility, and risk exposure), both at the microlevel and at the macro-level.
* This article benefited from my stay at Harvard's Institute for Quantitative Social Science in spring 2007. For comments and encouragement, I am very grateful to Torben Iversen and David Soskice, as well as to Peter Hall and students in his dissertation workshop at the ces. A previous version of this article was presented at the annual meeting of the American Political Science Association, Chicago, 2007. Also very much appreciated are comments and suggestions from Pablo Beramendi, Sarah Brooks, Herbert Kitschelt, William Minozzi, Tony Mughan, Scott Moser, Michael Neugart, Steve Nickell, Irfan Nooruddin, David Rueda, Ken Scheve, and Inés Valdez, as well as from three anonymous reviewers. The usual disclaimers apply.