Embedding technological transformation: the welfare state and citizen attitudes toward technology

Abstract

Much scholarly attention has been given to the potentially disruptive distributional implications of new technologies in labor markets. Less explored is the way citizens as socially embedded individuals perceive and respond to technological transformation. This study fills this gap by exploring how welfare state institutions shape and are shaped by citizens' perceptions of technological transformation. My analysis covering over 50 developed and developing countries finds that welfare state generosity is associated with a greater acceptance of technological change. I also provide evidence consistent with the expectation that labor market interventions of the welfare state have the potential to reduce the skill cleavage over technological transformation by mitigating the insecurity faced by the low-skilled. Additionally, citizens embracing technological transformation are more supportive of the welfare state than techno-skeptics are.