Do People with Specific Skills Want More Social Insurance? Not in the United States

Abstract

Skill specificity is thought to increase preferences for social insurance (Iversen and Soskice, 2001, American Political Science Review 95,875), especially where employment protections are low, notably the United States (Gingrich and Ansell, 2012, Comparative Political Studies 45, 1624). The compensating differentials literature, by contrast, suggests that neither skill specificity, nor labor market protections affect preferences when wages adjust for differences in risks and investment costs. We examine these competing predictions using U.S. data on general and specific skills. Absolute and relative skill specificity have a robust positive correlation with income, but are negatively correlated with preferences for social protection. Our results strongly support the compensating differentials approach.

Unemployment Insurance, Risk, and the Acquisition of Specific Skills: An Experimental Approach

“…The Varieties of Capitalism framework has provoked a spate of empirical studies around social insurance and skills. Most of these have focused on evaluating the relationship between workers' skills and survey based measures of support for social insurance and redistribution (Ahlquist, Hamman and Jones, 2017;Cusak, Iversen and Rehm, 2006;Gingrich and Ansell, 2012;Iversen and Rhem, 2022;Nickelsburg and Timmons, 2012;Rehm, 2009Rehm, , 2011Sjöberg, 2008;Timmons and Nickelsburg, 2014). These studies face a series of empirical and conceptual challenges.…”