Why Doesn't the United States Have a European-Style Welfare State?

By A. Alesina, Edward L. Glaeser, Bruce I. Sacerdote, William C. Brainard, George L. W. Perry, Michael C. Burda, Jennifer Hunt, Steven N. Durlauf, Frank Levy, S. Fischer and 8 more. 2001

162 citations recorded by the source corpus.

European countries are much more generous to the poor relative to the US level of generosity. Economic models suggest that redistribution is a function of the variance and skewness of the pre-tax income distribution, the volatility of income (perhaps because of trade shocks), the social costs of taxation and the expected income mobility of the median voter. None of these factors appear to explain the differences between the US and Europe. Instead, the differences appear to be the result of racial heterogeneity in the US and American political institutions. Racial animosity in the US makes redistribution to the poor, who are disproportionately black, unappealing to many voters. American political institutions limited the growth of a socialist party, and more generally limited the political power of the poor.

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Citations in the corpus

Immigration, Ethnic Diversity, and Political Outcomes: Evidence from Denmark (2018, background): “…as well as the level of public spending or public C© The editors of The Scandinavian Journal of Economics 2017. goods (Easterly and Levine, 1997; Alesina et al., 1999, 2001, 2003; Easterly, 2001; Okten and Osili, 2004; Vigdor, 2004; Banerjee et al., 2005; Miguel and Gugerty, 2005; Lassen,…”
Racism and redistribution in the United States: A solution to the problem of American exceptionalism (2006, background): “Alesina et al. (2001) regress, for a panel of countries, the degree of redistribution on the size of the country's poor ethnic minority, and find a strong negative relationship.”
“Last-Place Aversion”: Evidence and Redistributive Implications (2014, unknown): “Especially in the American context, scholars often argue that racial, ethnic and cultural divisions (Woodward 1955; Alesina et al. 2001; Frank 2005) or a strong belief in income mobility (Benabou and Ok, 2001) limit support for redistribution.”