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An Asset Theory of Social Policy Preferences

    • Published online: 19 April 2002

We present a theory of social policy preferences that emphasizes the composition of peopleÕs skills. The key to our argument is that individuals who have made risky investments in skills will demand insurance against the possible future loss of income from those investments. Because the transferability of skills is inversely related to their specificity, workers with specific skills face a potentially long spell of unemployment or a significant decline in income in the event of job loss. Workers deriving most of their income from specific skills therefore have strong incentives to support social policies that protect them against such uncertainty. This is not the case for general skills workers, for whom the costs of social protection weigh more prominently. We test the theory on public opinion data for eleven advanced democracies and suggest how differences in educational systems can help explain cross-national differences in the level of social protection.

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An earlier version of this article was presented at the 2000 annual meeting of the American Political Science Association, August 31ÐSeptember 3, 2000. We thank Chris Adolph, Chris Anderson, Thomas Cusack, Robert Fannion, Jeff Frieden, Geoff Garrett, Robert Goodin, Peter Hall, Robert Keohane, Gary King, Herbert Kitschelt, Hans-Peter Kriesi, Katerina Linos, Fritz Scharpf, Michael Wallerstein, and participants in the Kennedy SchoolÕs 2000 Inequality Summer Institute for many helpful comments. We are particularly grateful to Jim Alt and Ada W. Finifter for their many helpful suggestions. Torben Iversen gratefully acknowledges financial support from the Glenn Campbell and Rita Ricardo-Campbell National Fellowship at the Hoover Institution, Stanford University.
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American Political Science Review
  • ISSN: 0003-0554
  • EISSN: 1537-5943
  • URL: /core/journals/american-political-science-review
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