IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-03603011.html
   My bibliography  Save this paper

Trust and the Welfare State: the Twin Peaks Curve

Author

Listed:
  • Yann Algan

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPREMAP - Centre pour la recherche économique et ses applications - ECO ENS-PSL - Département d'économie de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres)

  • Pierre Cahuc

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, X - École polytechnique - IP Paris - Institut Polytechnique de Paris, ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique, CREST - Centre de Recherche en Economie et Statistique [Bruz] - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz])

  • Marc Sangnier

Abstract

We show the existence of a twin peaks relation between trust and the size of the welfare state that stems from two opposing forces. Uncivic people support large welfare states because they expect to benefit from them without bearing their costs. But civic individuals support generous benefits and high taxes only when they are surrounded by trustworthy individuals. We provide empirical evidence for these behaviors and this twin peaks relation in the OECD countries.

Suggested Citation

  • Yann Algan & Pierre Cahuc & Marc Sangnier, 2014. "Trust and the Welfare State: the Twin Peaks Curve," Working Papers hal-03603011, HAL.
    • Handle: RePEc:hal:wpaper:hal-03603011
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03603011
    as

    Download full text from publisher

    File URL: https://sciencespo.hal.science/hal-03603011/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Diebold, Francis X. & Chen, Celia, 1996. "Testing structural stability with endogenous breakpoint A size comparison of analytic and bootstrap procedures," Journal of Econometrics, Elsevier, vol. 70(1), pages 221-241, January.
    2. Edward Glaeser & Giacomo Ponzetto & Andrei Shleifer, 2007. "Why does democracy need education?," Journal of Economic Growth, Springer, vol. 12(2), pages 77-99, June.
    3. Thomas Piketty, 1995. "Social Mobility and Redistributive Politics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 551-584.
    4. repec:hal:spmain:info:hdl:2441/1mhdgtufmp9u2blp3nkko6i6f3 is not listed on IDEAS
    5. Roland Benabou & Efe A. Ok, 2001. "Social Mobility and the Demand for Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 447-487.
    6. Corneo, Giacomo & Gruner, Hans Peter, 2002. "Individual preferences for political redistribution," Journal of Public Economics, Elsevier, vol. 83(1), pages 83-107, January.
    7. Roland Iwan Luttens & Marie-Anne Valfort, 2012. "Voting for Redistribution under Desert-Sensitive Altruism," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(3), pages 881-907, September.
    8. Yann Algan & Pierre Cahuc & Andrei Shleifer, 2013. "Teaching Practices and Social Capital," American Economic Journal: Applied Economics, American Economic Association, vol. 5(3), pages 189-210, July.
    9. Alesina, Alberto & La Ferrara, Eliana, 2005. "Preferences for redistribution in the land of opportunities," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 897-931, June.
    10. Daniel S. Hamermesh, 2004. "Subjective Outcomes in Economics," Southern Economic Journal, John Wiley & Sons, vol. 71(1), pages 1-11, July.
    11. Christian Bjørnskov & Gert Svendsen, 2013. "Does social trust determine the size of the welfare state? Evidence using historical identification," Public Choice, Springer, vol. 157(1), pages 269-286, October.
    12. Donald W. K. Andrews, 2003. "Tests for Parameter Instability and Structural Change with Unknown Change Point: A Corrigendum," Econometrica, Econometric Society, vol. 71(1), pages 395-397, January.
    13. Erzo F. P. Luttmer, 2001. "Group Loyalty and the Taste for Redistribution," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 500-528, June.
    14. Andrews, Donald W K, 1993. "Tests for Parameter Instability and Structural Change with Unknown Change Point," Econometrica, Econometric Society, vol. 61(4), pages 821-856, July.
    15. Martin Ljunge, 2012. "The Spirit of the Welfare State? Adaptation in the Demand for Social Insurance," Journal of Human Capital, University of Chicago Press, vol. 6(3), pages 187-223.
    16. Andreas Bergh & Christian Bjørnskov, 2011. "Historical Trust Levels Predict the Current Size of the Welfare State," Kyklos, Wiley Blackwell, vol. 64(1), pages 1-19, February.
    17. Hetherington, Marc J., 1998. "The Political Relevance of Political Trust," American Political Science Review, Cambridge University Press, vol. 92(4), pages 791-808, December.
    18. Daniel S. Hamermesh, 2004. "Subjective Outcomes in Economics," Southern Economic Journal, John Wiley & Sons, vol. 71(1), pages 2-11, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yann Algan & Pierre Cahuc & Marc Sangnier, 2016. "Trust and the Welfare State: the Twin Peaks Curve," Economic Journal, Royal Economic Society, vol. 126(593), pages 861-883, June.
    2. repec:hal:spmain:info:hdl:2441/dd7iu65nm8cmbffuv10399qpu is not listed on IDEAS
    3. Fabio Sabatini & Francesco Sarracino & Eiji Yamamura, 2014. "Social norms on rent seeking and preferences for redistribution," Econometica Working Papers wp55, Econometica.
    4. repec:spo:wpmain:info:hdl:2441/dd7iu65nm8cmbffuv10399qpu is not listed on IDEAS
    5. Collewet, Marion & Fairley, Kim & Kessels, Roselinde & Knoef, Marike & van Vliet, Olaf, 2024. "The design of welfare: unraveling taxpayers' preferences," OSF Preprints 4am7e, Center for Open Science.
    6. Keely, Louise C. & Tan, Chih Ming, 2008. "Understanding preferences for income redistribution," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 944-961, June.
    7. Roy Cerqueti & Fabio Sabatini & Marco Ventura, 2019. "Civic capital and support for the welfare state," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 53(2), pages 313-336, August.
    8. Erik Schokkaert & Tom Truyts, 2017. "Preferences for redistribution and social structure," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 545-576, December.
    9. Algan, Yann & Cahuc, Pierre & Sangnier, Marc, 2011. "Efficient and Inefficient Welfare States," IZA Discussion Papers 5445, Institute of Labor Economics (IZA).
    10. Fabio Sabatini & Marco Ventura & Eiji Yamamura & Luca Zamparelli, 2020. "Fairness and the Unselfish Demand for Redistribution by Taxpayers and Welfare Recipients," Southern Economic Journal, John Wiley & Sons, vol. 86(3), pages 971-988, January.
    11. Di Tella, Rafael & Galiani, Sebastian & Schargrodsky, Ernesto, 2012. "Reality versus propaganda in the formation of beliefs about privatization," Journal of Public Economics, Elsevier, vol. 96(5), pages 553-567.
    12. Joan Esteban & Laurence Kranich, 2003. "The Social Contracts with Endogenous Sentiments," Working Papers 71, Barcelona School of Economics.
    13. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    14. Kerr, William R., 2014. "Income inequality and social preferences for redistribution and compensation differentials," Journal of Monetary Economics, Elsevier, vol. 66(C), pages 62-78.
    15. Neher, Frank, 2012. "Preferences for redistribution around the world," Discussion Papers 2012/2, Free University Berlin, School of Business & Economics.
    16. Roland Iwan Luttens & Marie-Anne Valfort, 2012. "Voting for Redistribution under Desert-Sensitive Altruism," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(3), pages 881-907, September.
    17. Erzo F. P. Luttmer & Monica Singhal, 2011. "Culture, Context, and the Taste for Redistribution," American Economic Journal: Economic Policy, American Economic Association, vol. 3(1), pages 157-179, February.
    18. Andreas Georgiadis & Alan Manning, 2012. "Spend it like Beckham? Inequality and redistribution in the UK, 1983–2004," Public Choice, Springer, vol. 151(3), pages 537-563, June.
    19. Matteo Cervellati & Joan-Maria Esteban & Laurence Kranich, 2010. "Work Values, Endogenous Sentiments and Redistribution," Working Papers 434, Barcelona School of Economics.
    20. Joan Costa-Font & Frank Cowell, 2015. "Social Identity And Redistributive Preferences: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(2), pages 357-374, April.
    21. Yamamura, Eiji, 2012. "Social capital, household income, and preferences for income redistribution," European Journal of Political Economy, Elsevier, vol. 28(4), pages 498-511.
    22. Ilyana Kuziemko & Michael I. Norton & Emmanuel Saez & Stefanie Stantcheva, 2015. "How Elastic Are Preferences for Redistribution? Evidence from Randomized Survey Experiments," American Economic Review, American Economic Association, vol. 105(4), pages 1478-1508, April.

    More about this item

    Keywords

    Welfare State; Trust; Civism; Corruption; Redistribution;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • Z1 - Other Special Topics - - Cultural Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-03603011. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.