Does Knowledge Matter? Survey Evidence for Knowledge-Based, Self-Interested Welfare Attitudes in South Korea

Abstract

The effect of income on individuals' welfare attitudes varies across societies. Existing studies focus on institutions and macroeconomic conditions to explain the variation. We argue that knowledge mediates self-interested individuals' income-based welfare attitudes. We focus on a set of specific knowledge relevant for assessing the distributive effects of the welfare state: awareness of fiscal constraint, understanding of tax system, information on transfer system, and objective assessment of one's economic status. At the micro-level, the lack of knowledge renders higher (/lower) income citizens to be more (/less) supportive of social spending than they would under better information. At the aggregate level, a prevalent lack of knowledge dilutes income-based cleavages over social spending. To test our argument, we conducted an original survey in South Korea where a number of previous studies found little or no income effect. The survey-based evidence lends support to our argument.