Political Support for Social Insurance: How Important are Labor Market Risks?

Most advanced countries have comprehensive social policies addressing the issues in labor markets. However, there are considerable differences across nations with regard to their coverage and generosity of publicly provided social assistance. Additionally, most of the public programs have been subject to substantial changes over time. These disparities can be related to the certain labor market characteristics and in particular the risk exposure of the employees. The book inspects the underlying reasons of demand for social insurance by establishing a direct link to labor market uncertainties. Occupational unemployment rate is treated as an estimate of labor market risk, and it is concluded that this is the main explanatory variable. The results suggest that rather than the type of human capital investment, other forms of labor market risks shape the insurance policies. The book is a contribution to the literature on public choice models of social policy and individual social policy decisions.