Social Trust and Demand for Redistribution. Is There a Crowding out Effect?

The debate about the relationship between social capital the welfare state has produced contradictory results for a long time. The crowding out hypothesis states that the growth of the welfare state would erode social capital, as the action of the state leave no room for non-regulated spontaneous cooperation. In sharp contrast, the crowding in hypothesis states that there is virtuous circle between the size of the welfare state and the stock of social capital in a particular country, since generous welfare states (specially those relying on universalistic programs) will produce a particular sense of fairness and solidarity toward fellow citizens. Yet, the empirical evidence testing the explanatory power of these theories is mostly inconclusive. To further our knowledge of this puzzle, in this paper I focus specifically on the relationship between social trust and preferences for redistribution at the individual level in a sample of European countries belonging to different welfare state regimes.

Welfare Policies and Solidarity Toward the Elderly

In this paper we analyze the effect of welfare policies oriented toward the elderly on solidarity toward the elderly in a sample of European countries. The research question is whether more generous welfare policies crowd out solidarity. For this purpose, we analyze four waves of the SHARE database. We use multilevel analysis to estimate the effect of national variables on transfers toward the elderly, controlling for individual level variables. At the national level we focus on the effect of public spending on policies oriented toward the elderly after controlling for some other relevant variables, such as the proportion of elderly people, female labor force participation and unemployment. Our results indicate that expenditure in social protection toward the elderly has a positive and significant (albeit moderate) effect on the economic support received by the elderly (which is in line with the Crowding-in hypothesis). However, in the case of time transfers, we find that expenditure in social protection toward the elderly has a negative and significant impact on the time transfers received by the elderly (which is consistent with the Crowding-out hypothesis).