Labor Market Conditions and Partisan Voting: How Unemployment Hurts the Left
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Labor Market Conditions and Partisan Voting: How Unemployment Hurts the Left Anton Brännlund1 Accepted: 26 October 2020 © The Author(s) 2020
Abstract Fluctuations in the labor market are a natural part of the business cycle, and they have attracted attention from political scientists for decades. Some scholars argue that left-wing parties benefit from rising rates of unemployment while others claim that voters rally behind conservative parties when the labor market weakens. I argue that the heterogeneous response of voters to a rise in the unemployment rate is due to differences in asset wealth. Put simply, the well-off have less need for social insurance, so they vote for conservative parties in order to put a cap on social spending when the unemployment rate rises; by contrast, asset-less voter opt for the left, with an eye to preserving their entitlements. I show with panel data from Swedish electoral districts that left-wing parties gain an electoral advantage when the local unemployment rate rises in less well-off areas, but they lose support when unemployment rises in wealthier districts. Keywords Partisanship · Unemployment · Wealth · Social insurance
Introduction Political scientists believe that changes in the unemployment rate have the power to influence democratic elections. It is furthermore commonly claimed, in both public and academic debate, that voters react to economic uncertainty. Unemployment should, therefore, generate electoral volatility, by impelling larger numbers of voters to worry about their economic safety or that of others. Some scholars accordingly argue that the economy is a partisan issue, in the sense that voters move along the left/right dimension as labor-market conditions change. Some argue that left-wing parties benefit from rising rates of unemployment because voters demand more government spending when economic conditions are harsh (Dassonneville and LewisBeck 2013; Wright 2012). Others contend that voters rally behind conservative * Anton Brännlund [email protected] 1
Uppsala University, Gamla Torget 6, Uppsala, Sweden
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parties during economic downturns, as citizens who are about to tighten their belts prefer to cut down on government spending as well (Stevenson 2001; Durr 1993)— and especially to tone down post-material policies associated with the left (Kayser and Grafström 2016). Fluctuations in the labor market are a natural part of the business cycle, and they have attracted attention from political scientists for decades. One area within the overlap between politics and economics, however, has been less studied: the electoral consequences of the massive increase in household wealth. Due to rising asset prices, asset-owners have become significantly wealthier over recent decades, widening the gap between haves and have-nots. Wealth in the world has doubled since the year 2000, and it is currently at $56,540 per adult. Rising asset prices benefit households that hold assets, allowing them to become less de
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