Preferences for Reforms: Endowments vs. Beliefs

Preferences for Reforms: Endowments vs. Beliefs
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Volume/Issue: Volume 2022 Issue 033
Publication date: February 2022
ISBN: 9798400202414
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Topics covered in this book

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Labor , Economics- Macroeconomics , Economics / General , Political Economy , Demography , political opinions , preferences , political economy , regulation , reform , employment protection , beliefs , ideology , endowments , surveys , , IMF working paper research Department , EPL deregulation , copyright page , individuals' belief , knowledge indicator , Labor markets , Labor force , Southern Europe , Northern Europe

Summary

Are preferences for reforms driven by individuals’ own endowments or beliefs? To address this question, we conducted a cross-country survey on people’s opinions on employment protection legislation—an area where reform has proven to be difficult and personal interests are at stake. We find that individuals’ beliefs matter more than their own endowments and personal pay-offs. A randomized information treatment confirms that beliefs explain views about reform, but beliefs can change with new information. Our results are robust to several robustness tests, including to alternative estimation techniques and samples.