We perform an experiment on social insurance to provide a laboratory replica of some
important features of the welfare state. In the experiment, all individuals in a group
decide whether to make a costly effort, which produces a random (independent)
outcome for each one of them. The group members then vote on whether to redistribute
the resulting and commonly known total sum of earnings equally amongst themselves.
This game has two equilibria, if played once. In one of them, all players make effort and
there is little redistribution. In the other one, there is no effort and nothing to
redistribute. A solution to the repeated game allows for redistribution and high effort, by
the threat to revert to the worst of these equilibria. Our results show that redistribution
with high effort is not sustainable. The main reason for the absence of redistribution is
that rich agents do not act differently depending on whether the poor have worked hard
or not. There is no social contract by which redistribution may be sustained by the threat
of punishing the poor if they do not exert effort. Thus, the explanation of the behavior of
the subjects lies in Hobbes, not in Rousseau
