The Democratic Politics of Job Loss
30 Pages Posted: 16 Aug 2018 Last revised: 30 Aug 2018
Date Written: August 1, 2018
In this paper, we argue that the disappearance of jobs that served as the backbone of a politically moderate working class fragmented parties on the left. First, we build a simple model of strategic platform competition to show that a decrease in the cohesiveness of the left vote fragments the parties on the left and shifts the enacted policy away from the median voter. Informed by the model, we then present evidence of these phenomena. We construct a new database on the fragmentation of political parties by vote and seat share in the parliament of 35 OECD countries from 1945 to 2017. We show that a 10 percent fall in industrial jobs is associated with an increase of 0.6 parties on the left. This effect is mostly present in Proportional Representation systems, among which the effect is stronger the more proportional the system. No effect on overall or right-parties fragmentation from changes in industrial jobs is observed, as expected. In order to test the extent to which these results are causal, we perform an instrumental variables estimation, which largely confirms the direction of our results. Finally, using the timing of scheduled elections to identify fixed-effects estimates, we provide suggestive evidence that left fragmentation shifts policy focus away from the median voter, as predicted by the model.
Keywords: industrial jobs, party fragmentation, electoral
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