Dependency Status and Demand for Social Insurance: Evidence from Experiments and Surveys

Current thinking on the origins and size of the welfare state often ignores household relations in which people may depend on others for income or have dependents themselves. The influence of "dependency status" on individuals' political preferences is unknown. We report results from a laboratory experiment designed to estimate the effect of dependency on preferences for policies that insure against labor market risk. Results indicate that (1) willingness to vote in favor of a social insurance policy is highly responsive to unemployment risk, (2) symmetric, mutual dependence is unrelated to support for insurance, but (3) asymmetric dependence (being dependent on someone else) increases support for social insurance. We connect our lab results to observational survey data and find similar relationships.