Reaching Out or Pulling Back: Macroeconomic Conditions and Public Support for Social Welfare Spending

Abstract

In economic hard-times, do Americans call for increases in governmental assistance, or do they clamor for declines in government assistance? We address this question by identifying the impact of state-level macroeconomic conditions on public support for social welfare spending. We analyze individual-level data from the 1984–2000 National Election Studies, combined with state-level macroeconomic indicators of inflation, unemployment, and productivity. We find that state-level inflation, not state-level unemployment nor state-level productivity, consistently and consequentially shapes citizens’ support for social welfare. With rising inflation, Americans become more supportive of means-tested social welfare spending. Our analyses generally reaffirm the value Americans place on the social welfare safety net, especially during times of economic duress. When the going gets tough, Americans reach out, rather than pull back.