The Electoral Impact of Unemployment: Evidence Using District-Level Data from the Financial Crisis
26 Pages Posted: 11 Aug 2014
Date Written: 2014
Do economic downturns increase voter support for left parties? Or will they benefit parties of the right? The financial crisis provides us with the op- portunity to make several methodological improvements over the previous literature. In our empirical analysis, we combine fine-grained registry-data on the economic impact of the crisis and how it varied across 5000 elec- toral districts, with district-level data on vote-shares for all major parties in Swedish parliamentary elections before and after the crisis. Because the economic impact was so diverse across districts, we can estimate the elec- toral impact of unemployment more efficiently than most previous studies. Moreover, because the crisis was an external and unexpected shock to the Swedish economy, we argue that the selection bias that is usually inherent in estimating the electoral impact of unemployment is mitigated. Accord- ing to our results, the electoral impact of crisis-induced unemployment was large, benefiting traditional right parties.
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