Nov 13, 2011

Is this world fair? The Latin perspective

This is from a fascinating article, "The demand for Social Insurance: Does Culture Matter?", published in the The Economic Journal (2011) by Eugster et al: 
Does culture shape the demand for social insurance against risks to health and work? We study this issue across language groups in Switzerland where a language border sharply separates social groups at identical actual levels of publicly provided social insurance. We find substantially stronger support for expansions of social insurance among residents of French, Italian or Romansh-speaking language border municipalities compared with their German-speaking neighbours in adjacent municipalities. Informal insurance does not vary enough to explain stark differences in social insurance but differences in ideology and segmented media markets potentially contribute to the discrepancy in demand for social insurance.
The authors conclude:
. . . [O]ur estimates suggest that the demand for social insurance (as measured by voting results) is up to 10 percentage points higher among the Latin-Swiss population than among the German-Swiss population. We also find consistently higher (lower) support for more generous (restrictive) unemploy- ment and health insurance regulations among the Latin-Swiss than among the German-Swiss population . . . 
We find evidence that Latin speakers believe less than German speakers that hard work pays off, and they feel they have less freedom and control over their lives. This is consistent with an ideological predisposition that favours redistribution. A reason for such ideological differences may be historical. Latin Swiss have been the oppressed minority for centuries and repeated experience of suppression may have fostered weaker beliefs in a just world. Finally, we have documented the strong segmentation of media markets by language regions. The lack of social communication between language groups via media on important political issues such as the introduction and/ or reform of social insurance programmes can explain the lack of convergence in beliefs among social groups that live under similar institutional arrangements. Thus, historical factors that shape beliefs can have persistent effects.

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