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Speaker:
Tim Vlandas

Tim Vlandas, Oxford University

Income Decline and the Political Backlash against Advanced Welfare States

(joint work with Olivier Jacques and David Weisstanner)

Abstract

What are the political consequences of long-run income stagnation and decline for welfare states across advanced capitalist democracies (ACDs)? We argue that long-run income falls lead to a political backlash against the taxes necessary to fund welfare states. We develop a theoretical framework linking people’s declining income to their lower support for taxes that fund social insurance and consumption smoothing, which both shift income from one’s present to one’s future, and redistribution, which shifts income from individuals with above median income to others. We first test the linkages between economic decline and tax preferences on panel survey data from the United States, repeated cross-section survey data in Canada and Japan. Next, matching unique information on income changes with cross-national micro-level data on both policy preferences and electoral behaviour, we then show that income declines increase individual preferences for spending cuts and electorally reward governments that implement them. Finally, long-run income decline is associated with welfare state cuts. Thus, both the variation (distribution) and the level (mean) of income play a crucial role in the politics of welfare states. The finding that higher income increases support for the taxes necessary to fund the welfare state is important not just to understand the contemporary backlash against the welfare state, but also provides a new, less functionalist, interpretation for the importance of growth during past episodes of welfare state expansion.

Tim Vlandas is a currently an Associate Professor of Comparative Social Policy in the Department of Social Policy and Intervention, a Fellow of St Antony’s College and an associate member of Nuffield College at the Universoty of Oxford. He has held visiting positions at the LSE, Sciences Po Paris, and the ETUI. Using a comparative political economy approach, Tim's research explores the political and economic determinants and consequences of social and economic policies in Europe. He is currently working on his next monograph on ageing and the economy, to be published by Oxford University Press

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