Welfare Retrenchment and Social Unrest

John Zhang, LSE

Does welfare retrenchment cause social unrest? I study this question by using parish-level expenditure on poor relief from post-Napoleonic England and applying generative AI to a corpus of 3.9 million newspaper column transcriptions to collect the category, date and location for each reported unrest incident. Reduced-form analysis leveraging a shift-share instrument finds a causal effect of welfare retrenchment on social unrest between 1819 and 1831. Grievances arising from social and habitual comparisons are identified as plausible mechanisms, whereas the counterfactual analysis finds a 50% reduction in unrest intensity had there been a 10% blanket increase in annual welfare expenditure.

See extended abstract

 Presented in Session 71. Civil Society and the Welfare State