Skip to main content

How do Economic Circumstances Determine Preferences? Evidence from Long-run Panel Data


Preferences for redistribution and social spending are correlated with income and unemployment risk, but it is unclear how these relationships come about. I build a theory emphasizing that only large changes in economic circumstances provide the information and motivation needed for people to change their preferences. Stable long-run preferences are shaped mainly by early socialization, which includes economic and ideological influences from the family, and early labor market experiences. Enduring shocks, low intergenerational mobility and the tendency of left-wing parents to be poorer generate correlations between circumstances and preferences. Because preferences are stable, greater inequality may not increase aggregate support for redistribution. Support is found for the theory with panel data from Switzerland, using a range of empirical tests.

Hide All

Department of Political Science, University College London, United Kingdom (Email: I wish to thank the editor, three anonymous reviewers, Ben Ansell, Adam Berinsky, Charlotte Cavaille, Tom Cusack, Jeremy Ferwerda, Jens Hainmueller, Torben Iversen, Dan de Kadt, Dean Knox, Stephanie Rickard, David Singer, Kathy Thelen and Teppei Yamamoto for useful suggestions and comments. This study uses data collected by the Swiss Household Panel (SHP), which is based at the Swiss Centre of Expertise in the Social Sciences (FORS). The SHP is financed by the Swiss National Science Foundation. The data are available for free download from FORS with a data use contract, which can be obtained at Data replication sets are available in Harvard Dataverse at: and online appendices at:

Hide All
Aaroe Lene, and Petersen Michael B.. 2014. Crowding Out Culture: Scandinavians and Americans Agree on Social Welfare in the Face of Deservingness Cues. Journal of Politics 76 (3):684697.
Alesina Alberto, and Glaeser Edward. 2005. Fighting Poverty in the US and Europe: A World of Difference. Oxford: Oxford University Press.
Alesina Alberto, and La-Ferrara Eliana. 2005. Preferences for Redistribution in the Land of Opportunity. Journal of Public Economics 89 (3):897931.
Allison Paul. 2009. Fixed Effects Regression Models, Quantitative Applications in the Social Sciences Series no. 160. Thousand Oaks, CA: Sage Publications.
Alwin Duane F., and Krosnick Jon A.. 1991. Aging, Cohorts, and the Stability of Sociopolitical Orientations over the Life Span. American Journal of Sociology 97 (1):169195.
Armingeon Klaus. 2005. Institutionalizing the Swiss Welfare State. West European Politics 24 (2):145168.
Barber Benjamin, Beramendi Pablo, and Wibbels Erik. 2013. The Behavioral Foundations of Social Politics: Evidence from Surveys and a Laboratory Democracy. Comparative Political Studies 46 (10):11551189.
Blekesaune Morten. 2006. Economic Conditions and Public Attitudes to Welfare Policies. European Sociological Review 23 (3):393403.
Borjas George. 2003. The Labor Demand Curve Is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market. Quarterly Journal of Economics 118 (4):13351374.
Browning Martin, and Crossley Thomas F.. 2001. The Life-Cycle Model of Consumption and Saving. Journal of Economic Perspectives 15 (3):322.
Campbell Andrea. 2002. Self-Interest, Social Security, and the Distinctive Participation Patterns of Senior Citizens. American Political Science Review 96 (3):565574.
Cavaille Charlotte, and Trump Kris-Stella. 2015. The Two Facets of Social Policy Preferences. Journal of Politics 77 (1):146160.
Chong Dennis, Citrin Jack, and Conley Patricia. 2001. When Self-Interest Matters. Political Psychology 22 (3):541570.
Corneo Giacomo, and Gruner Hans-Peter. 2002. Individual Preferences for Political Redistribution. Journal of Public Economics 83 (1):83107.
Cusack Tom, Iversen Torben, and Rehm Philipp. 2006. Risks at Work: The Demand and Supply Sides of Government Redistribution. Oxford Review of Economic Policy 22 (3):365389.
Dinas Elias. 2013. Opening ‘Openness to Change’: Political Events and the Increased Sensitivity of Young Adults. Political Research Quarterly 66 (4):868882.
Feldman Stanley. 2003. Values, Ideology and the Structure of Political Attitudes. Pp. 477--508 in Oxford Handbook of Political Psychology, edited by D. Sears, L. Huddy and R. Jervis. Oxford: Oxford University Press.
Feldman Stanley, and Steenbergen Marco. 2001. The Humanitarian Foundation of Support for Social Welfare. American Journal of Political Science 45 (3):658677.
Finseraas Henning. 2009. Income Inequality and Demand for Redistribution: A Multilevel Analysis of European Public Opinion. European Sociological Review 32 (1):94119.
Finseraas Henning. 2017. The Effect of a Booming Local Economy in Early Childhood on the Propensity to Vote: Evidence from a Natural Experiment. British Journal of Political Science 47 (3):609629.
Georgiadis Andreas, and Manning Alan. 2012. Spend it Like Beckham: Inequality and Redistribution in the UK, 1983–2004. Public Choice 151 (3):537563.
Giuliano Paola, and Spilimbergo Antonio. 2014. Growing up in a Recession. Review of Economic Studies 81 (2):787817.
Green Donald, and Gerken Ann-Elizabeth. 1989. Self-Interest and Public Opinion Toward Smoking Restrictions and Cigarette Taxes. Public Opinion Quarterly 53 (1):116.
Gregg Paul, and Tominey Emma. 2005. The Wage Scar from Male Youth Unemployment. Labour Economics 12 (4):487509.
Hainmueller Jens, and Hiscox Michael J.. 2010. Attitudes toward Highly Skilled and Low Skilled Immigration: Evidence from a Survey Experiment. American Political Science Review 104 (01):6184.
Iversen Torben, and Soskice David. 2001. An Asset Theory of Social Policy Preferences. American Political Science Review 95 (4):875893.
Jenkins Stephen P. 2000. Modelling Household Income Dynamics. Journal of Population Economics 13 (4):529567.
Jennings M. Kent, and Markus Gregory B.. 1984. Partisan Orientations over the Long Haul: Results from the Three-Wave Political Socialization Panel Study. American Political Science Review 78 (4):10001018.
Jennings M. Kent, Stoker Laura, and Bowers Jake. 2009. Politics across Generations: Family Transmission Reexamined. Journal of Politics 71 (3):782799.
Kahn Lisa. 2010. The Long-Term Labor-Market Consequences of Graduating from College in a Bad Economy. Labour Economics 17 (2):303316.
Kelly Nathan J., and Enns Peter K.. 2010. Inequality and the Dynamics of Public Opinion: The Self-Reinforcing Link between Economic Inequality and Mass Preferences. American Journal of Political Science 54 (4):855870.
Kuklinski James H., Quirk Paul J., Jerit Jennifer, and Rich Robert F.. 2001. The Political Environment and Citizen Competence. American Journal of Political Science 45 (2):410424.
Lane Jan-Erik, and Maeland Reinert. 2001. The Growth of the Public Sector in Switzerland. West European Politics 24 (2):169190.
Luttmer Erzo F. P., and Singhal Monica. 2011. Culture, Context, and the Taste for Redistribution. American Economic Journal: Economic Policy 3 (1):157179.
McCall Leslie, and Kenworthy Lane. 2008. Inequality, Public Opinion, and Redistribution. Socio-Economic Review 6 (1):3568.
Margalit Yotam. 2013. Explaining Social Policy Preferences: Evidence from the Great Recession. American Political Science Review 107 (1):80103.
Meltzer Allan H., and Richard Scott F.. 1981. A Rational Theory of the Size of Government. Journal of Political Economy 89 (5):914927.
Moene Karl Ove, and Wallerstein Michael. 2001. Inequality, Social Insurance and Redistribution. American Political Science Review 95 (4):859874.
Mroz Thomas, and Savage Timothy. 2006. The Long-Term Effects of Youth Unemployment. Journal of Human Resources 41 (2):259293.
Neundorf Anja, Smets Kaat, and Garcia-Albacete Gema. 2013. Homemade Citizens: The Development of Political Interest During Adolescence and Young Adulthood. Acta Politica 48 (1):92116.
Obinger Herbert, Starke Peter, Moser Julia, Bodegan Claudia, Gindulis Edith, and Liebfried. Stephan 2010. Transformations of the Welfare State: Small States, Big Lessons. Oxford: Oxford University Press.
O’Grady Tom. 2017. “Replication Code for: How do Economic Circumstances Determine Preferences? Evidence from Long-run Panel Data”,, Harvard Dataverse, V1.
Oreopoulos Philip, Wachter Til Von, and Heisz Andrew. 2012. The Short- and Long-Term Career Effects of Graduating in a Recession. American Economic Journal: Applied Economics 4 (1):129.
Prior Markus. 2010. You’ve Either Got it or You Don’t: The Stability of Political Interest over the Life Cycle. Journal of Politics 72 (3):747766.
Rehm Philipp. 2009. Risks and Redistribution: An Individual-Level Analysis. Comparative Political Studies 42 (7):855881.
Rehm Philipp. 2011. Social Policy by Popular Demand. World Politics 63 (02):271299.
Rehm Philipp, Hacker Jacob S., and Schlesinger Mark. 2012. Insecure Alliances: Risk, Inequality, and Support for the Welfare State. American Political Science Review 106 (2):386406.
Rehm Philipp, Hacker Jacob S., and Schlesinger Mark. 2013. The Insecure American: Economic Experiences, Financial Worries, and Policy Attitudes. Perspectives on Politics 11 (1):2349.
Sears David O., and Funk Carolyn L.. 1990. The Limited Effect of Economic Self-Interest on the Political Attitudes of the Mass Public. Journal of Behavioral Economics 19 (3):247271.
Sears David O., and Funk Carolyn L.. 1999. Evidence of the Long-Term Persistence of Adults’ Political Predispositions. Journal of Politics 61 (1):128.
Sears David O., Lau Richard R., Tyler Tom R., and Allen Harris M.. 1980. Self-Interest vs. Symbolic Politics in Policy Attitudes and Presidential Voting. American Political Science Review 74 (3):670684.
Simon Herbert. 1982. Models of Bounded Rationality. Cambridge, MA: MIT Press.
Soroka Stuart, and Wlezien Christopher. 2005. Opinion-Policy Dynamics: Public Preferences and Public Expenditure in the United Kingdom. British Journal of Political Science 35 (4):665689.
Stegmueller Daniel. 2011. Apples and Oranges? The Problem of Equivalence in Comparative Research. Political Analysis 19 (4):471487.
Stegmueller Daniel. 2013. Modeling Dynamic Preferences: A Bayesian Robust Dynamic Latent Ordered Probit Model. Political Analysis 21 (3):314333.
Stevenson Randolph. 2001. The Economy and Policy Mood: A Fundamental Dynamic of Democratic Politics? American Journal of Political Science 45 (3):620633.
Svallfors Stefan. 2003. Welfare Regimes and Welfare Opinions: A Comparison of Eight Western Countries. Social Indicators Research 64:495520.
Tversky Amos, and Kahneman Daniel. 1974. Judgement Under Uncertainty: Heuristics and Biases. Science 185 (4157):11241131.
Van Oorschot Wim. 2006. Making the Difference in Social Europe: Deservingness Perceptions among Citizens of European Welfare States. Journal of European Social Policy 16 (1):2342.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

British Journal of Political Science
  • ISSN: 0007-1234
  • EISSN: 1469-2112
  • URL: /core/journals/british-journal-of-political-science
Please enter your name
Please enter a valid email address
Who would you like to send this to? *


Type Description Title
Supplementary Materials

O’Grady Dataset

Supplementary Materials

O’Grady supplementary material
Figures S1-S5 and Tables S1-S7

 PDF (161 KB)
161 KB


Altmetric attention score

Full text views

Total number of HTML views: 4
Total number of PDF views: 60 *
Loading metrics...

Abstract views

Total abstract views: 293 *
Loading metrics...

* Views captured on Cambridge Core between 1st November 2017 - 12th December 2017. This data will be updated every 24 hours.