Mitigating tough times? How material self‐interest influences citizens' welfare state behavior

Abstract It is a long‐standing view that citizens support the welfare state because it provides insurance against future income losses. However, existing studies have struggled to isolate the effect of future‐oriented material self‐interest from normative and political predispositions. Using population‐wide, administrative panel data from Denmark, I study citizens' choice to take up government‐funded social insurance in times of economic uncertainty: a critical case for material self‐interest to be at stake. Using as‐if random variation in exposure to signals of unemployment risks, I show that economic uncertainty increases the probability of buying supplementary unemployment insurance coverage. Linking the administrative records to individual‐level survey data reveals that exposure to unemployment risk signals increases feelings of job insecurity, further suggesting that economic worries shape citizens' behavior within the welfare state. These findings highlight the role of material self‐interest in influencing the welfare state, providing valuable insights for policymakers when designing social insurance policies.