Preferences for Transfers in Ireland and Europe Liam Delaney Department of Economics,TCD ISPA Policy Conference Dublin September 17, 2004

Introduction and Overview Part of a wider series of papers examining preferences for redistribution in Ireland. Part of a wider series of papers examining preferences for redistribution in Ireland. Theories surrounding why societies demand and supply income maintenance. Theories surrounding why societies demand and supply income maintenance. Results of European Social Survey Results of European Social Survey Results of New Nationwide Survey. Results of New Nationwide Survey. Today focuses particularly on income maintenance support to families. Today focuses particularly on income maintenance support to families.

Why Do We Demand Income Maintenance Schemes? Contractarian Theories Contractarian Theories Utilitarian Theories Utilitarian Theories Political Motivations Political Motivations Individual Attitude and Psychology Theories Individual Attitude and Psychology Theories Information Information Ideology Ideology Family Values Family Values Religiosity Religiosity

Surveys Design and Administration Issues with Attitudinal Approach – Understanding, Social Desirability, Meaning. Issues with Attitudinal Approach – Understanding, Social Desirability, Meaning. Pilot Studies. Pilot Studies. Nationwide Face-to-Face Survey Administered in June 2004 by Lansdowne Market Research. Nationwide Face-to-Face Survey Administered in June 2004 by Lansdowne Market Research. European Social Survey: Conducted in 21 countries in European Social Survey: Conducted in 21 countries in 2002.

Support for Redistribution in Europe (ESS 2002)

Family Values and Religiosity

Personal Values in Europe (1)

Personal Values in Europe (2)

Determinants of Support National determinants can be analysed at a correlational level but very difficult to disentangle effects statistically. National determinants can be analysed at a correlational level but very difficult to disentangle effects statistically. Important national correlates of support include Important national correlates of support include GDP Per Capita (Strongly Negative) GDP Per Capita (Strongly Negative) % FDI (Strongly Negative) % FDI (Strongly Negative) Religiosity (Strongly Positive) Religiosity (Strongly Positive) Family Values (Strongly Positive) Family Values (Strongly Positive) Individual Level Regressions allow greater variability in response thus enabling the estimation of a wider variety of effects. Individual Level Regressions allow greater variability in response thus enabling the estimation of a wider variety of effects.

Individual Demand for Redistribution Predictors in 19 European Countries (ESS 2002) Question: “Should the government intervene to reduce income differences”: All betas p<.001; Listening to and watching current affairs programmes do not predict significantly Support R 2 =.107 Education Years Self-Enhancement Age Group Values Other Values Internet Usage Household Income Family Values Religiosity Ever Unemployed Gender F

Support for Transfers in Ireland Competitive versus Egalitarian Ideology most important explanation from our survey. Competitive versus Egalitarian Ideology most important explanation from our survey. More important than personal circumstances and not very well explained by personal circumstances. More important than personal circumstances and not very well explained by personal circumstances. Negatively predicts support for several types of transfer. Negatively predicts support for several types of transfer. Public’s Preferences very similar to experts preferences and expert predictions. Public’s Preferences very similar to experts preferences and expert predictions. Tendency to underestimate support for the least popular schemes. Tendency to underestimate support for the least popular schemes.

Support for Increased Spending

Top Priorities for Increased Spending BenefitPercentage Pensions30.2% Disabled/Carers26.6% Child Benefit 11.7% Unemployed8.02% Single Parents 6.04% None of the Above 14.4%

Support for Increased Spending on Transfers Predictors for Ireland (LMR/TCD Survey) Question (abridged): “Do you think spending should be increased decreased or kept the same (1 = decreased substantially, 4 remain the same, 7 increased substantially). ***equals significant at the.01 level, ** equals significant at the.05 level, *equals significant at the.1 level. Support For Increases R 2 =.264 College Degree Other Minus Self Gender M Age Competitive Ideology Perception of Fraud Income > 60,000 pa Efficiency Dependent Children * -0.18*** 0.064** -0.21*** *** ** 0.15*

Expert Predictions (1) Sample of 32 people working in the area asked to estimate public preferences. Sample of 32 people working in the area asked to estimate public preferences. The results showed that experts own preferences were for more spending for many of the transfers (e.g. Pensions, Unemployment). The results showed that experts own preferences were for more spending for many of the transfers (e.g. Pensions, Unemployment). Predictions very accurate (0.899 rank correlation). Predictions very accurate (0.899 rank correlation).

Expert Predictions (2)

Transfers and Gender Weak evidence of gender differences in support for government spending at a general level. Weak evidence of gender differences in support for government spending at a general level. Weak evidence of gender differences in support for social transfers at a general level. Weak evidence of gender differences in support for social transfers at a general level. Significant Gender differences emerge in support for carer’s allowance, child benefit, widow’s widowers and orphans’ pension. Significant Gender differences emerge in support for carer’s allowance, child benefit, widow’s widowers and orphans’ pension. Points to Income entitlement rather than “essential” explanation of gender gaps in fiscal preferences. Points to Income entitlement rather than “essential” explanation of gender gaps in fiscal preferences.

Child Benefit Progressive? Child Benefit a Universal Scheme transferring approximately 1.7 billion euro. Child Benefit a Universal Scheme transferring approximately 1.7 billion euro. Support for Means-Testing Child Benefit or Making it Progressive in Income is an interesting question from an income and gender perspective. Support for Means-Testing Child Benefit or Making it Progressive in Income is an interesting question from an income and gender perspective. Support for proposal substantially higher among men on top bracket than among women on top bracket. Support for proposal substantially higher among men on top bracket than among women on top bracket.

Support for Progressiveness by Income and Gender

Conclusions Broad public support for Income Maintenance Schemes. Broad public support for Income Maintenance Schemes. Pensions and Carer’s Benefits highest public priority for increased spending. Pensions and Carer’s Benefits highest public priority for increased spending. Attitudes to conditionality and/or progressivity of child benefit a very interesting case study in household economics and deserves further discussion. Attitudes to conditionality and/or progressivity of child benefit a very interesting case study in household economics and deserves further discussion.