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Bismarck’s Welfare State and the Socialists
This paper examines the political consequences of introducing the welfare state targeted at blue-collar workers in 19th-century Germany. I conceptualize Bismarck’s reform as an accommodation strategy to combat the socialist party as an emerging challenger party. The result of a difference-in-differences design shows that the socialist party benefited in elections due to the reform. The mechanism analysis points to the socialists’ issue ownership by adopting a stronger reformist stance. The results are not driven by other political and economic channels related to the reform.
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