Dealing with Technological Change: Social Policy Preferences and Institutional Context

• Published date: 01 June 2023
• DOI: http://doi.org/10.1177/00104140221139381
• Author: Marius R. Busemeyer,Tobias Tober
• Date: 01 June 2023
• Subject Matter: Articles

Article

Comparative Political Studies

2023, Vol. 56(7) 968–999

© The Author(s) 2022

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DOI: 10.1177/00104140221139381

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Dealing with

Technological Change:

Social Policy Preferences

and Institutional Context

Marius R. Busemeyer

1

and Tobias Tober

1



Abstract

How does technological change affect social policy preferences across dif-

ferent institutional contexts? In this paper, we argue that individuals who

perceive high levels of technology-related employment risks prefer passive

policies like unemployment benef‌its over active measures like retraining in

order to satisfy the need for immediate compensation in the case of job loss.

At the same time, general support for passive (active) policy solutions to

technological change should be signif‌icantly lower (higher) in countries where

generous compensation schemes already exist. As the perception of

technology-related employment risks increases, however, we expect that

social policy preferences among high-risk individuals should converge across

different welfare state contexts. We use novel data from a diverse set of 24

OECD countries that specif‌ically measure preferred social policy solutions to

technological change in a constrained choice scenario. Applying statistical

methods that explicitly model the trade-off faced by individuals, we f‌ind

evidence in line with our theoretical expectations.

Keywords

technological change, social policy preferences, welfare state, comparative

political economy

1

University of Konstanz, Konstanz, Germany

Corresponding Author:

Tobias Tober, University of Konstanz, Konstanz, Baden-Württemberg, Germany.

Email: tobias.tober@uni-konstanz.de

Introduction

The institutional evolution of modern welfare states has always been driven by

the forces of technological change. For instance, the negative side effects of

the f‌irst Industrial Revolution at the turn of the 19th and 20th century formed

the political impetus for the development of the f‌irst social insurance systems

(Ansell & Lindvall, 2020). The shift from the industrial to the post-industrial

knowledge society has been accompanied by the emergence of new social

risks such as single parenthood, low skills, and long-term unemployment,

which have contributed to the transformation and recalibration of traditional,

transfer-heavy forms of social policy toward social investment policies that

emphasize human capital formation (Bonoli, 2013;Hemerijck, 2018;Iversen

& Soskice, 2015).

It is therefore not surprising that scholarly and public debates about the

consequences of recent technological change for the economy, the society, and

the welfare state are gaining momentum. Pessimistic perspectives in this

debate fear mass unemployment, political polarization, and rising inequality

(Ford, 2016). In contrast, technological optimists emphasize job creation and

improving working conditions (Acemoglu & Restrepo, 2019;Brynjolfsson &

McAfee, 2014). As we will explain in greater detail below, much of the

existing scholarship focuses on the past and predicted future effects of

technological change on labor market outcomes such as employment and

wage levels. Only recently have scholars in comparative political economy

started to examine the role of rapid technological change in the formation of

social policy preferences (Dermont & Weisstanner, 2020;Gallego et al., 2022;

Im, 2021;Jeffrey, 2021;Kurer & H¨

ausermann, 2021;Sacchi et al., 2020;

Thewissen & Rueda, 2019;Zhang, 2019).

Even though these studies provide important early insights, they have

inherent limitations. In particular, extant research either works with survey

data collected in individual countries (Gallego et al., 2022;Jeffrey, 2021;

Zhang, 2019) or with existing cross-national surveys, mainly the European

Social Survey (ESS, see Im, 2021;Sacchi et al., 2020;Thewissen & Rueda,

2019). While the results of the former are inevitably country-specif‌ic, the latter

group of studies uses survey questions that are not specif‌ically designed to

measure technology-related social policy preferences. This study seeks to

address both of these limitations.

Our empirical contribution goes beyond existing research in three sig-

nif‌icant respects. First, we use novel, internationally comparative survey data

that were collected as part of the OECD’s Risks That Matter (RTM) survey.

This survey includes a series of original questions designed by the authors of

this paper that explicitly focus on technology-related social policy prefer-

ences. Second, we model these preferences in a constrained-budget envi-

ronment, effectively forcing respondents to prioritize between different policy

Busemeyer and Tober 969

options. This provides more robust estimates of policy preferences compared

to unconstrained and more conventionally worded survey items (H¨

ausermann

et al., 2019;Neimanns et al., 2018). In analyzing these data, we apply

multivariate linear mixed models (MLMMs), which allow multiple response

variables to be considered at the same time. Thus, we are able to assess how

support for different policy solutions to technological change simultaneously

responds to changes in the perception of technology-related risks. Finally, our

paper—transcending the strong focus on micro-level associations in the extant

work—examines whether the macro-level institutional context inf‌luences the

association between perceived technological risk and policy preferences at the

individual level.

Previewing our results, we show that individuals who perceive techno-

logical change as an imminent employment risk face a trade-off between the

short-term gains from compensation and the long-term gains from skill in-

vestment. Given this trade-off, risk-perceiving individuals favor immediate

over long-term gains, supporting compensatory measures relatively more than

social investment policies. Moreover, we argue that the relationship between

perceived technological risks and the corresponding support for different

policy responses is strongly inf‌luenced by the institutional context. Indi-

viduals with low risk perceptions are signif‌icantly less likely to demand

compensation in generous welfare states compared to similar individuals in

residual welfare states. However, among individuals with high risk percep-

tions, we f‌ind a convergence of preferences in the sense that these individuals

prioritize compensation over social investment as a policy response to

technological change, regardless of the welfare state context.

While we do not examine whether and how policy-makers respond to these

demands, we believe that the strong preference for short-term compensation

among individuals perceiving themselves to be vulnerable to technology-

related labor market risks may signif‌icantly impact the range of viable policy

options in response to technological change. We therefore conclude this paper

with a discussion of the political implications of our f‌indings.

Technological Change and the Welfare State: A

Short Review

As mentioned above, there is now a fairly well-developed literature on the

impact of technological change on labor markets, focusing on its effects on

wages and employment opportunities. Inspired by the pioneering work of

Autor et al. (2003) on routine-biased technological change (RBTC), this

research argues that the recent wave of technological change is likely to have a

polarizing effect (often called the “hollowing-out-of-the-middle effect”)on

labor markets. This is because both high-level jobs involving abstract ana-

lytical, creative, management, and communicative skills and low-level jobs,

970 Comparative Political Studies 56(7)