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Culture, diversity, and the welfare state

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  • Gruendler, Klaus
  • Koellner, Sebastian
Abstract
We examine how cultural socialization and diversity influence welfare systems. Our sample includes 134 countries (1975-2014). We employ spatial patterns and biological characteristics as instrumental variables for culture. The results show that culture is an important predictor for the generosity of welfare states: welfare provision is higher in countries with loose family ties and individualistic attitudes, high prevalence of trust and tolerance, and low acceptance of unequally distributed power. These channels explain 20-50% of the cross-country variation in welfare provision. Cultural heterogeneity (diversity) influences redistribution non-linearly: moderate diversity levels impede redistribution, while higher levels offset the negative effect.

Suggested Citation

  • Gruendler, Klaus & Koellner, Sebastian, 2020. "Culture, diversity, and the welfare state," Munich Reprints in Economics 84739, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:84739
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    More about this item

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • Z1 - Other Special Topics - - Cultural Economics
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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