An Asset Theory of Social Policy Preferences TORBEN IVERSEN Harvard University

W e present a theory of social policy preferences that emphasizes the composition of people’s skills.The key to our argument is that individuals who have made risky investments in skills will demandinsurance against the possible future loss of income from those investments. Because the transferability of skills is inversely related to their specificity, workers with specific skills face a potentially long spell of unemployment or a significant decline in income in the event of job loss. Workers deriving most of their income from specific skills therefore have strong incentives to support social policies that protect them against such uncertainty. This is not the case for general skills workers, for whom the costs of social protection weigh more prominently. We test the theory on public opinion data for eleven advanced democracies and suggest how differences in educational systems can help explain cross-national differences in the level of social protection. I t is well known that human capital rivals physicalcapital as a source of personal and national wealth.Indeed, it is the single most important determinant of personal income in advanced industrialized coun-tries. Yet, whereas physical assets—buildings, machin-ery, goods, and money—have long been recognized as essential for understanding the political interests of their owners, surprisingly little is known about the role of human capital in explaining public policy prefer