Fairness Principles and Social Insurance Preferences

• In Event: Behavioral Political Economy: Regimes

Abstract

A growing literature shows that most people are willing to accept income differences that are based on effort and choice, but reject inequalities that are the outcome of luck and circumstances. Welfare states follow different logics in their response to these fairness considerations. In this paper, we study how the interplay between fairness and the nature of the welfare state influences redistribution preferences and political behaviour. We focus on three main questions. First, do people differ in their views of which welfare system they deem to be more fair. Second, do people respond to the source of income differences when choosing the welfare system they would prefer to live in. And finally, what are the trade-offs that individuals make between own material well-being and fairness considerations for their insurance system choice. In an online experiment, we manipulate the source of income differences (luck or merit) and the level of individual risk exposure. We investigate insurance system choices under different constellations of the treatment parameters

Authors

• Verena Rebecca Fetscher, University of Hamburg

• David Rueda, University of Oxford