Globalization and the Welfare State: Testing the Microfoundations of the Compensation Hypothesis

Stefanie Walter
  • International Studies Quarterly, June 2010, Oxford University Press (OUP)
  • DOI: 10.1111/j.1468-2478.2010.00593.x

Do globalization losers feel more insecure, want more social protection and vote for left parties?

What is it about?

This paper uses survey data from Switzerland to examine how exposure to international trade, foreign direct investment, and offshoring risks affect individuals' feelings of economic insecurity, social policy preferences, and voting behavior. It shows that globalization losers – low skilled-individuals who are exposed to the international economy – feel systematically more insecure, want more social protection, and are more likely to vote for the Social democrats. It thus provides a microfoundation for the so-called "compensation hypothesis", which suggests that economically more open countries tend to have bigger welfare states.

The following have contributed to this page: Dr. Stefanie Walter