"How do individuals insure themselves against economic shocks, as consumers and savers on their own, and as voters, through the political process? The recent financial and economic crisis has seen people lose their jobs and their housing equity, partly as a result of insufficient economic buffers in good times. What does this mean for social insurance? We need to understand the connection between household finances and political attitudes to social insurance and redistribution, both in good times and in bad.
I argue that in order to understand the political economy of redistribution and social insruance, we need to allow for imperfect asset markets in the form of liquidity (or credit) constraints and for asset holdings, including housing equity.
The goal of the project is to investigate theoretically and empirically on Danish data (i) how differences in liquidity constraints affect political attitudes and preferences; (ii) where such differences come from and what that means for understanding links between personal traits and personality, socio-economics and political attitudes and behaviour; (iii) how these insights can be used to understand political attitudes towards the new wave of neo-paternalistic policies (including so-called ‘nudging’) inspired by behavioural economic research; and (iv) whether differences in liquidity constraints can help us understand changes in political attitudes and preferences over the long-run.
The central empirical part of the project is to link uniquely detailed individual level high quality data from Danish administrative registers - including current and historical data on all tax-declared income sources, bank deposits, assets and liabilities, as well as detailed demographics, educational and occupational data - to a running, large-scale panel survey of a large random sample of adult Danes, and to extend this survey both in time and in scope, specifically with questions on political attitudes and political preferences."
Fields of science
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