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Preferences for Transfers in Ireland and Europe Liam Delaney Department of Economics,TCD

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.

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Preferences for Transfers in Ireland and Europe Liam Delaney Department of Economics,TCD

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  1. Preferences for Transfers in Ireland and EuropeLiam DelaneyDepartment of Economics,TCD ISPA Policy Conference Dublin September 17, 2004

  2. Introduction and Overview • Part of a wider series of papers examining preferences for redistribution in Ireland. • Theories surrounding why societies demand and supply income maintenance. • Results of European Social Survey 2002. • Results of New Nationwide Survey. • Today focuses particularly on income maintenance support to families.

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

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

  5. Support for Redistribution in Europe (ESS 2002)

  6. Family Values and Religiosity

  7. Personal Values in Europe (1)

  8. Personal Values in Europe (2)

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

  10. Individual Demand for RedistributionPredictors in 19 European Countries (ESS 2002) Age -0.003 Education Years -0.02 Self-Enhancement R2=.107 -.0.04 Group Values 0.07 0.12 Support Other Values -0.05 Household Income 0.08 Religiosity -.02 Internet Usage 0.12 Ever Unemployed 0.02 .07 Gender F Family Values Question:“Should the government intervene to reduce income differences”: All betas p<.001; Listening to and watching current affairs programmes do not predict significantly

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

  12. Support for Increased Spending

  13. Top Priorities for Increased Spending

  14. Support for Increased Spending on TransfersPredictors for Ireland (LMR/TCD Survey) Gender M -0.003 College Degree -0.02 Other Minus Self 0.05* R2=.264 Age 0.064** -0.18*** Support For Increases Competitive Ideology -0.318** Income > 60,000 pa -0.122*** Efficiency -0.21*** Perception of Fraud 0.15* Dependent Children 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.

  15. Expert Predictions (1) • 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). • Predictions very accurate (0.899 rank correlation).

  16. Expert Predictions (2)

  17. 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 social transfers at a general level. • 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.

  18. Child Benefit Progressive? • 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 proposal substantially higher among men on top bracket than among women on top bracket.

  19. Support for Progressiveness by Income and Gender

  20. Conclusions • Broad public support for Income Maintenance Schemes. • 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.

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