The Thinning of Social Ties: Electoral Consequences of Indebtedness under Austerity
48 Pages Posted: 13 Jan 2021 Last revised: 25 Mar 2021
Date Written: December 18, 2020
What are the political consequences of rising household debt in the context of fiscal austerity? As governments scale back the welfare state, many voters address ensuing financial shortfalls by borrowing money. I argue that debt individualizes and re-commodifies and shifts electoral support away from incumbents to opposition and anti-establishment parties by triggering feelings of political neglect, anger and resentment, and increasing economic insecurity. I examine this argument by leveraging spatial and temporal variation in the rollout of Universal Credit, a large-scale welfare reform in the United Kingdom. Using fine-grained administrative data on unsecured debt, I demonstrate that fiscal austerity generated an increase in indebtedness, strengthened voter turnout and support for UKIP while lowering support for the Conservatives. I then use individual-level survey data to explore the mechanisms that link debt and political behavior. The results suggest that rising indebtedness increases the political costs of welfare retrenchment and creates new political cleavages.
Keywords: political economy, social policy, political behavior, household debt
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