Economic Hardship and Welfare Policy Preferences: What Can the COVID-19 Pandemic Tell Us?

Abstract

We explore how individual perceptions of the nature of economic hardships correlate with preferences over different types of welfare state responses (i.e. universal or means-tested, temporary or permanent, cash transfers and medical services) in a U.S. survey. We utilize differing public opinion about the length of the COVID-19 pandemic’s economic disruptions and whether it causes nationwide economic instability or unevenly affects the population. Respondents who view the pandemic’s economic hardship as temporary should be less likely to support permanent welfare policies and, due to costs, those who view the pandemic as having targeted effects should be less likely to support universal programs. Unexpectedly, our findings indicate that if Americans believe the effects are temporary, they are less supportive of any new program. If Americans believe that the pandemic’s effects are targeted, they are, as expected, less supportive of universal programs, but are also less likely to support doing nothing, indicating that equity concerns may influence preferences. Patterns of support are very similar for services and transfers.