National Worry and the Psychological Value of Social Spending

ABSTRACT This paper studies “national worry.” It finds that in the West European nations the intensity of worry seems to be inversely linked to the level of social spending in a country. We also demonstrate that the proportion of citizens in Western Europe who report extreme‐worry levels has risen steadily over the last two decades. The United Kingdom experienced the fastest increase in worry. Our country‐panel estimates point to a potentially central role for the little‐discussed ex ante psychological value of the welfare state (i.e., the benefit to the whole population, and not just the mental‐wellbeing gains going ex post to the smaller number of citizens who actually draw upon welfare‐state help). Worry levels move with other economic variables, including the unemployment rate, and we provide some of the first estimates of the patterns of worry across different kinds of individuals. Finally, the analysis is extended to the set of OECD countries. We believe that much needs to be understood about the troubling rise of worry in modern society.