Public opinion on policy and budgetary trade-offs in European welfare states: evidence from a new comparative survey

Abstract

In the wake of the 'Great Recession', welfare states have entered a new phase of austerity. Simultaneously, new social risks and the rise of the knowledge economy fuel new demands on the welfare state. We analyse how demands for social investment policiesparticularly educationcome into conflict with budgetary concerns, using new survey data on individual-level preferences in eight European countries. Paying particular attention to fiscal and budgetary trade-offs, we find that social investments are generally very popular, but as soon as realistic budget constraints are added, public support drops considerably. The largest drop occurs when social investments would be financed with cutbacks in social transfers rather than higher taxes or higher public debt levels. Furthermore, when studying the determinants of preferences, we find that in the era of permanent austerity distributive conflicts within welfare states exhibit a different political dynamic than conflicts about the size of the welfare state.

Tax Constraints, Social Policy Preferences, and Support for Redistribution

“…Are respondents willing to pay for their preferred level of welfare state spending or do they engage in trade-offs when forming their welfare state and redistribution preferences? Following up on a long-standing, but sometimes neglected, line of public opinion research [7,17,18] and contributing to recent trends in welfare state research [14,23,33], we have shown that tax constraints lead to lower aggregate support for the welfare state. But our results clearly show that such trade-offs between spending and taxes do not apply to all areas of the welfare state and might only be relevant for policies that provide concentrated benefits for some people, such as unemployment benefits or redistribution, social investment [14], or family policy [8].…”

“…One problem which arises here is that explicitly adding one constraint or trade-off-in our case, between additional spending and taxes-might encourage respondents to think also about other possible trade-offs. Increasing deficits or cutting other welfare state programs are two other alternatives to finance more spending [14,17]. Also, adding a tax constraint raises awareness that someone has to pay for the additional spending, but it remains open to the respondents' interpretation of who should pay [23].…”

“…Moreover, previous research has identified several other individual characteristics, which are correlated with income or political ideology, but also with support for the welfare state [1,5,14,15]. Therefore, we use gender, age in three age categories (below 35, 36-59, and 60 years and over), education (low, middle, and highest level of school education), and employment status (in work, retired, unemployed, other (i.e., in education, doing housework, on leave)) as further control variables in the multivariate analysis.…”

“…On average, support for educational spending [14] and for day care or libraries [8], but also for families and social assistance [7], goes down if respondents are made aware about the costs of increased spending. Nevertheless, we lack studies that also cover other areas of the welfare state where it might be less likely to observe changes in support due to tax constraints.…”

“…Support for the welfare state, and, hence, also opposition to retrenchment, might be considerably lower if people are made aware of the costs associated with more welfare state spending [3,7,14]. Moreover, respondents might be willing to accept retrenchment in one area of the welfare state if they have a strong priority to expand spending in other areas of the welfare state [14]). A higher retirement age might be acceptable if this ensures that pension benefit levels remain stable [15].…”