Technological Change, University Education, and Welfare State Preferences

In recent decades, technological change and the rise of university education have fundamentally reshaped the composition of labour markets in the advanced democracies and the relative fortunes of workers with different levels of education. This paper investigates how these twin trends have affected other-regarding preferences for the welfare state by carrying out an online survey experiment with a sample of 4,000 respondents from the United States. We find that people are less inclined to provide welfare state support to the university educated. So, not only do university-educated workers think they are less in need of welfare state insurance, other people also think that they are. We also find evidence that this dynamic has been exacerbated by (skill-biased) technological change that has (further) improved the position of university-educated workers. Overall, our results hold important insights for the future of the welfare state in contemporary knowledge economie