Policy design and policy feedback in welfare retrenchment: A survey experiment in China

Abstract A growing body of public policy literature examines how welfare retrenchment reform produces attitudinal and behavioral feedback effects. This study adds to the literature on welfare reforms by exploring how different policy designs, combined with individual proximity to reform, produce heterogeneous feedback effects. Bridging the theories of policy feedback and policy design, we theorize how different policy designs shape individuals' self‐interest or sociotropic considerations when they form opinions on welfare reform. The feedback effects of these different policy designs are channeled by individual proximity to the reform, resulting in heterogeneous responses to proposed policy change. Seizing an opportune time window when the Chinese government undertook a public consultation program in 2020 regarding the proposed reform reallocating financial resources in individuals' medical savings accounts, we conducted a survey experiment to examine if two different policy designs led to varying feedback effects. We find that the moderate de facto retrenchment reform indeed triggered public opposition. Unlike previous research that emphasizes partisanship as a major source of heterogeneous feedback effects, our study reveals different sources of heterogeneity—public opposition to the proposed reform varies by the specific policy designs and individuals' past experiences with the existing health insurance policy.