3. Calls for greater social protection – if the price is right

3.1. Support for a government safety net remains high throughout the OECD

The vast majority of respondents throughout the OECD call for either more spending to protect their economic and social security or for a continuation of current levels of spending. On average, 67.7% of all respondents say they think government should be doing more. Rates range from 41.2% in Denmark (where the social protection system is well-developed) to 92.9% in Chile. A majority of people in all but two countries –Denmark and Norway – say that government should be doing more. Perhaps unsurprisingly, in most countries, respondents whose household experienced job loss during COVID-19 were more likely to call for greater government intervention (Figure 3.1).

In countries where there is relatively lower support for additional social spending, it is worth noting that most of the rest of the respondents want those countries to continue to spend at the same level at which they currently do. 43.7% of respondents in Denmark, 27.3% in France, 35.95% in the Netherlands, 41.5% in Norway, and 34.4% in Switzerland say that they want government to spend about the same amount as they do now. France leads in the share of respondents who say they want government to spend less (15.3%), followed by Poland (12.2%), Turkey (11.6%) and the United States (11.3%).

Figure 3.1. Demands for greater government support are common, regardless of job security during the pandemic

Percent of respondents responding “more” or “much more” when asked “Do you think the government should be doing less, about the same, or more to ensure your economic and social security and well-being?”, by reported experience of job loss in the household since the start of the pandemic, 2020

Note: Respondents were asked whether they thought the government should be doing less, more, or the same as they are currently doing to ensure their economic and social security. Possible response options were “much less”, “less”, “about the same as now”, “more” and “much more”. Respondents could also choose “don’t know”. “Job loss in household” refers to respondents reporting that either they or any member of their household have/has either “Lost their job or been laid off permanently by their employer” and/or “Lost their self-employed job or their own business”, since the start of the COVID-19 pandemic.

Source: OECD Secretariat estimates based on the OECD Risks That Matter 2020 survey, https://www.oecd.org/social/risks-that-matter.htm

On average across countries, women are 5 percentage points more likely than men to say that government should be doing more to ensure their economic and social security – perhaps reflecting the higher perceived economic risks many women cite.

“The main challenge I have in the coming months is to keep my job. My company has already said it is not ruling out layoffs if the pandemic continues to affect people across the board. The government should help companies not lay off so many people. Although I realise that that is difficult.”

– 46-year-old woman, Spain  

        

Figure 3.2. Women more likely to call on government to help ensure economic and social security

Percent of respondents responding “more” or “much more” when asked “Do you think the government should be doing less, about the same, or more to ensure your economic and social security and well-being?”, by gender, 2020

Note: Respondents were asked whether they thought the government should be doing less, more, or the same as they are currently doing to ensure their economic and social security. Possible response options were “much less”, “less”, “about the same as now”, “more” and “much more”. Respondents could also choose “don’t know”.

Source: OECD Secretariat estimates based on the OECD Risks That Matter 2020 survey, https://www.oecd.org/social/risks-that-matter.htm.

3.2. Putting a price tag on social security

The delivery of social programmes comes at a cost to the government and to taxpayers, of course. The fiscal cost of social spending has not been at the forefront of policy discussions thus far, as generally OECD governments have recognised that they need to do “whatever it takes” to protect people and jobs during the crisis (OECD, 2020[2]). Yet most governments are borrowing at unprecedented levels (at least in peacetime) to survive the crisis (OECD, 2020[17]). Budgetary costs and hard decisions about which programmes and populations to prioritise will surely become more pressing political issues as governments move into the recovery period. RTM attempts to gauge the political feasibility of specific reforms by reminding respondents of the cost of social protection.

When respondents are primed to consider the tax and social contribution costs of specific expansions in the welfare state, support for government spending decreases relative to when people are simply asked whether government should do less, the same or more to ensure their security (Figure 3.1).

Nevertheless, even when asked to consider cost, a sizeable degree of support for social protection spending remains – at least for specific programmes. When primed with a fairly general reminder of the cost of social programmes, a majority of respondents in all 25 countries voice support for greater spending in at least one policy area, but typically more.

When considering the taxes they might have to pay and the benefits they might receive, seven out of ten respondents across countries say that they would support greater spending on public health services – the most popular issue area (Table 3.1). Health services are also the top spending priority in 12 of the 25 countries surveyed in RTM 2020 (Figure 3.3).

Figure 3.3. Health, pensions and long-term care are the spending priorities in most countries

Percent of respondents indicating that they would like to see the government spend more or much more in the following policy areas, sorted by highest priority issue in each country, bearing in mind the taxes the respondent’s household might have to pay and the benefits they might receive, 2020

Note: Respondents were asked whether they would like to see less, the same, or more government spending in different social policy areas, given the taxes they might have to pay and the benefits they and their family might receive. Possible response options were “spend much less”, “spend less”, “spend the same as now”, “spend more” and “spend much more”. Respondents could also choose “none” or “can’t choose”. Figure presents the issue with the greatest share of respondents indicating willingness to pay, per country. The full list of responses was family supports, education services and supports, employment supports, unemployment supports, income supports, housing supports, health supports, incapacity-related supports, pensions, long-term services for the elderly, public safety, none, and don’t know. Table shows an aggregation of the results “spend more” and “spend much more” per country and issue area.

Source: OECD Secretariat estimates based on the OECD Risks That Matter 2020 survey, https://www.oecd.org/social/risks-that-matter.htm.

There are many potential drivers of this result showing respondents’ view of health services. The presence of a global pandemic surely encourages greater prioritisation of health care provision, though health was also a top perceived risk in RTM 2018 – it is a risk everyone shares. The desire for greater health care spending may also be related to the aforementioned result that people are most satisfied with health care provision – suggesting that people may be more willing to invest in services that they feel are provided (relatively) well.1

Perhaps related to their economic insecurity, respondents whose households lost jobs during COVID show a stronger willingness to pay more in taxes to receive better social protection. There is especially strong support in this group for better investments in employment supports (e.g. job search services, skills training, access to entrepreneurial funds), unemployment supports, and income supports like minimum income benefits (OECD, 2021[1]).

Across countries, 60.3% of respondents whose household experienced job loss say that – thinking about the taxes they might have to pay and the benefits they might receive – they would like the government to spend more or much more in order to provide better unemployment supports (e.g. unemployment benefits). This figure stands in contrast to the 48.1% of respondents who did not experience outright job loss during COVID who call for greater government spending on unemployment supports – though this is, of course, still a large share. In Austria, Canada, Finland, Slovenia, and the United States, the preference gap between people whose households lost jobs and those who did not is greater than 20 percentage points. This is a sizeable divergence in preferences following COVID insecurity.

Figure 3.4. Respondents experiencing job loss during the pandemic are more likely to call for government action on pocketbook issues

Percent of respondents reporting that they would like government to spend “more” or “much more” on each policy area, by reported experience of job loss in the household since the start of the COVID-19 pandemic, unweighted cross-country average, 2020

Note: Respondents were asked whether they would like to see less, the same, or more government spending in different social policy areas, given the taxes they might have to pay and the benefits they and their family might receive. Possible response options were “spend much less”, “spend less”, “spend the same as now”, “spend more” and “spend much more”. Respondents could also choose “can’t choose”. “Job loss in household” refers to respondents reporting that either they or any member of their household have/has either “Lost their job or been laid off permanently by their employer” and/or “Lost their self-employed job or their own business”, since the start of the COVID-19 pandemic.

Source: OECD Secretariat estimates based on the OECD Risks That Matter 2020 survey, https://www.oecd.org/social/risks-that-matter.htm.

The next set of questions put a price tag on social programmes: an additional 2% of income in taxes and social contributions. People are most willing to pay more for better provision of health care, again, but faced with the 2% figure, the share supporting spending more in this policy area drops to 44.7%, on average, across countries (Table 3.2) – down from 70% when the cost is described more generally (Table 3.1).

“If I am unemployed [after college], I would need to rely on a different source for my basic needs, as my parents expect me to not rely on them after graduating. To address this, I hope the government can provide better resources for those who are unemployed, not just for sustenance, but also so they can find a job and escape that difficult financial situation.”

– 20-year-old woman, the United States  

        

Pensions are the issue where respondents are second-most likely to support paying an additional 2% of income in taxes and social contributions, on average across countries (Figure 3.5). This could of course be related to the personalised nature of pension contributions, as many countries have links between lifetime contributions and individual benefits received in retirement. Using the “2% of income” definition of cost, support for pensions is greatest in Slovenia: 62.7% of respondents there say they would favour spending more on pensions, even at the cost of an additional 2% of income.

Importantly, this specific price tag proposes the same rate to all respondents; it does not account for redistributive preferences in terms of who should pay.

Figure 3.5. Healthcare and pensions remain top issues when cost is mentioned, but support drops with a specific price tag

Percent of respondents responding selecting the top-rated policy area in each country when asked “Would you be willing to pay an additional 2% of your income in taxes and social contributions to benefit from better provision of and access to [insert policy area]”, 2020

Note: Respondents were asked how willing they would be to pay an additional 2% of their income in taxes/social contributions to benefit from better provision of and access to a list of 11 supports. Possible response options were “spend much less”, “spend less”, “spend the same as now”, “spend more” and “spend much more”. Respondents could also choose “none” or “don’t know” as a response option. Figure presents the issue with the greatest share of respondents indicating willingness to pay, per country, and the percentage willing to pay an additional 2% of their income in this area. (Top issues were health supports, pensions, education, or incapacity-related supports). The full list of responses was family supports, education services and supports, employment supports, unemployment supports, income supports, housing supports, health supports, incapacity-related supports, pensions, long-term services for the elderly, public safety, none, and don’t know.

Source: OECD Secretariat estimates based on the OECD Risks That Matter 2020 survey, https://www.oecd.org/social/risks-that-matter.htm.

3.3. How to fund social programmes? Redistributive preferences in a pandemic

Much of the discussion thus far has focused on what might be considered the social insurance function of the welfare state – health care, pensions, unemployment insurance and so on, which provide people with a degree of support at specific moments in the life cycle.

When thinking about the redistributive function governments play in reducing income inequality, respondents across countries are generally supportive of government intervention. On average across countries, 62.2% of people say that government should do more, or much more, to reduce income differences between the rich and the poor by collecting taxes and providing social benefits (Figure 3.6).

The countries where people are least likely to call for more redistribution – Denmark, the Netherlands, France – tend to have already relatively high levels of redistribution. These countries also have relatively high levels of satisfaction with current redistributive measures. Across countries, very few people say that government should be doing less to reduce income differences. The cross-national average calling for less intervention to reduce inequality is 10.3%.

“In Mexico, no [political] party has done enough to reduce the gap between the rich and the poor. There have been some attempts, like a very low pension for seniors, but they are very low amounts.”

– 59-year-old man, Mexico  

        

Figure 3.6. Most respondents would like government to do more to reduce income differences

Percent of respondents responding “more” or “much more” when asked “Governments can reduce income differences between the rich and the poor by collecting taxes and providing social benefits. In your country, do you think the government should do more or less to reduce income differences?”, 2020

Note: Respondents were asked whether they thought the government should be doing less, more, or the same as they are currently doing to reduce income differences between the rich and the poor. Possible response options were “much less”, “less”, “about the same as now”, “more” and “much more”. Respondents could also choose “can’t choose”.

Source: OECD Secretariat estimates based on the OECD Risks That Matter 2020 survey, https://www.oecd.org/social/risks-that-matter.htm.

When asked specifically whether government should tax the rich more than they currently do in order to support the poor, 64.5% of respondents, on average across countries, reply “yes” or “definitely yes”. This is slightly lower than the cross-national average in 2018, but since 2018 the rate also increased more in countries that are more unequal (OECD, 2021[18]). There is a slight positive correlation between the degree of income inequality in a country, measured by Gini, and demands for more redistribution and more progressive taxation (Figure 3.7) – suggesting that people are responding to inequality with demands for more redistribution. There is also a positive association between experiencing financial hardship during the pandemic and calls for greater redistribution (OECD, 2021[18]), similar to the findings looking at preferences for spending on specific programmes (Figure 3.4).

Figure 3.7. Higher inequality corresponds with greater calls for redistribution

Share of respondents who answer “more” or “much more” when asked whether government should redistribute more or tax the rich more, relative to Gini index of disposable income

Note: The Gini disposable income refers to 2018, apart from Chile, Denmark, Germany, Ireland, Italy, Switzerland, USA (2017), Mexico, the Netherlands (2016), and Turkey (2015).

Source: OECD Secretariat estimates based on the OECD Income Distribution Database and the OECD Risks That Matter 2020 survey https://www.oecd.org/social/risks-that-matter.htm. Publication forthcoming in (OECD, 2021[18]).