Today’s challenges for the modern Welfare State : a European perspective

Kurzfassung/Abstract

Understanding redistribution preferences in diverse societies is central to current debates on the European welfare state, yet empirical evidence remains incomplete. This dissertation contributes new evidence towards closing this gap. All three papers build on the large-scale comparative dataset of the ESS. In the first two papers OECD and Eurostat statistics are used to measure immigration. In addition asylum inflows are tracked by means of data from the European Observation Network for Territorial Development and Cohesion (ESPON) in the second paper. In the third paper detailed household income information from the European Union Statistics on Income and Living Conditions (EU-SILC) is used to enable a microsimulation of transfers required to eliminate poverty under a EU-wide Social Benefit Scheme. Combined, these data allow for both the replication of earlier findings (as in the first paper) and the development of new identification strategies (as in the second and third papers). Across the three studies, three consistent findings emerge. First, material self-interest remains stable over the three research papers: higher income is in general associated with less support for redistribution. Second, the Progressive’s Dilemma is not robust across time or space as the effect of heterogeneity is context-sensitive. Thus, short-run refugee inflows do not automatically undermine solidarity. In contrast, support for redistribution declines in regions less exposed to refugee inflows after 2015, while remaining largely unchanged in regions hosting large numbers of refugees, a robust pattern
that runs counter to the Progressive’s Dilemma hypothesis. Third, when redistribution is scaled to the European level, support depends crucially on incidence: individuals in net payer countries, and those who fear lower domestic benefits from EU social policies, are less supportive.
Generally, these results suggest that while self-interest is a stable driver, diversity and ethnic heterogeneity are far more complex and indeed context-dependent. This dissertation contributes to the literature in three ways. First, it demonstrates the importance of replication and extension tests that vary along temporal, spatial, and measurement dimensions. The current literature should consider how its empirical basis evolves over time and space. Also, the second paper provides new causal evidence on how asylum inflows shape redistribution preferences by exploiting the so-called “asylum crisis” as a natural experiment that generated exogenous variation in regional ethnic heterogeneity rates. Third, it highlights the role of fiscal incidence in shaping support for cross-national redistribution schemes. Taken together, these contributions advance our understanding of how solidarity, self-interest, and ethnic heterogeneity interact in modern European welfare states.
The first paper features an extension test of David Rueda’s (2018) study “Food Comes First, Then Morals: Redistribution Preferences, Parochial Altruism, and Immigration in Western Europe”. It analyzes how household size, an extended time horizon, and the inclusion of Eastern European countries affect the original findings. Building on these results, the second essay—joint work with Jakob Sch¨auble and J¨org Althammer—exploits the European refugee crisis of 2015/16 as a quasi-natural experiment to study the causal effects of increased ethnic heterogeneity on natives’ willingness to support welfare programs. The third essay analyzes how support for a European-wide minimum income scheme differs between individuals living in net payer versus net recipient countries.
All essays are based on stand-alone research papers that are included below in their current form