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This Element argues that the 2008 financial crisis marked a turning point for populism in Europe by extending economic insecurity to the middle class. As insecurity spread, trust in institutions and markets declined, bringing a large new group of disillusioned voters into the political arena. The authors show that this expansion of middle-class anxiety accounts for a substantial share of the rise in populist voting. The political impact was strongest in countries with limited fiscal space, where governments lacked credible tools to cushion economic losses. As voters' demand for protection grew, both new and established parties adjusted their platforms, with populist and protectionist positions becoming more prominent. Using a novel empirical strategy based on differences in occupational exposure to financial constraints, the authors identify the causal effect of crisis-driven insecurity and explain why populism has persisted in European politics. This title is also available as Open Access on Cambridge Core.
When and why do economic grievances result in support for populist parties? We address a long-standing puzzle in understanding populist voters. Existing studies have produced mixed results about how economic characteristics drive support for populist parties. We argue this is because scholars have overlooked the central importance of internal political efficacy, i.e., a belief in one’s ability to affect political outcomes. Using three pooled waves of the European Social Survey (ESS 2014, 2016, and 2018) with over 80,000 individual observations over time, we find that the economic determinants of populist support are contingent on internal political efficacy. Although there are reasons to think that the combined effect of economic circumstances and efficacy may be stronger on support for the populist left because of their stronger emphasis on social justice, we do not find evidence of this with the limited observations of the populist left in our sample. Critically, our findings contrast with the simplified and theoretically unsatisfying explanations of populist support we often encounter in the literature that are based solely on economic dissatisfaction. Instead, our results imply that recent trends in European politics are not only about economic issues but also about a voter’s belief in having agency and competence to affect change.
What is the impact of unemployment on far-right party support? This article develops a framework that links unemployment to far-right party support, while taking into account both the heterogeneity of the workforce and the role of labour market policies. More specifically, we focus on unemployment as a driver of economic insecurity and examine its effect on outsider and insider labour market groups. We identify the extent to which two labour market policies—unemployment benefits and Employment Protection Legislation (EPL)—mediate the effect of unemployment on economic insecurity, thus limiting the impact of unemployment on far-right party support. We carry out a large N analysis on a sample of 14 Western and 10 Eastern European countries between 1991 and 2013. We find that unemployment only leads to higher far-right support when unemployment benefits replacement rates are low. The results with regard to the mediating effect of EPL are more complex as EPL only mediates the impact of unemployment when we take into account the share of foreign-born population in the country.
Recent crises have raised concerns about intergenerational fairness and conflict and claims that older generations imperil the future of young people. These arguments may reflect the political intolerance towards older adults: political ageism. Why and which kinds of young people are more likely to adhere to such views is still uncertain. Prior studies refer to the importance of perceived threats and authoritarian values. We introduce an interaction effect, suggesting that perceived threats temper the impact of authoritarian values on intergenerational blame attribution and discriminatory views against older individuals’ political rights. The analysis of survey data from nine European countries, focusing on respondents aged 18–34, reveals that perceived economic threat rarely relates to increased ageism. Young individuals with authoritarian values are likelier to attribute intergenerational blame and hold politically ageist views. In Sweden and the UK, however, the effect of authoritarian values diminishes when young people perceive economic threats.
The literature on populism is divided on whether economic factors are significant and robust causes of populism. To clarify this, we performed the first systematic review and meta-analysis of the evidence of a causal association between economic insecurity and populism. We combined database searches with searching the citations of eligible studies and recently published reviews. We identified and reviewed thirty-six studies and presented a concise narrative summary and numerical synthesis of the key findings. Although we found significant heterogeneity in several dimensions, all studies reported a significant causal association. A recurrent magnitude was that economic insecurity explained around one-third of recent surges in populism. We tested for publication bias by conducting a funnel-plot asymmetry test and a density discontinuity test of the distribution of t-statistics. We found significant evidence of publication bias; however, the causal association between economic insecurity and populism remains significant after controlling for it.
The increase in pension eligibility ages in Australia, as elsewhere, throws into relief the consequences of gender inequality in employment. Because of career histories in lower paid and more insecure employment, a higher percentage of women than men are dependent on the age pension rather than on superannuation or savings and investments, and so will be disproportionately affected by deferred access. Yet, fewer women than men hold the types of ‘good jobs’ that will sustain them into an older age. Women are more likely to be sequestered in precarious employment, with reduced job quality and a greater potential for premature workforce exit. This article counterposes macro-level data drawn from national cross-sectional labour force statistics and the longitudinal Household Income and Labour Dynamics Australia survey, with case study analysis, based on interviews with 38 women in midlife insecure jobs, in order to identify the types of life course and labour market barriers that contribute to women’s reliance on the pension and the systemic disadvantage that will render them particularly vulnerable to any further erosion of this safety net. The analysis moves between this empirical evidence and a discussion, drawing on the theoretical literature, of the failure in equal opportunity endeavours over recent decades and what this means for later life workforce participation for women.
Political moderation in developed economies after World War II owed much to the large number of stable, well-paying industrial jobs. The decline in the number of working-class jobs has dealt a hard blow to parties on the center-left, causing them to fragment into smaller and more extreme parties. This is especially true in proportional representation electoral systems, which give voters little reason to vote for large parties in the political middle. Employing a novel dataset of parties’ vote share and seat share in 35 OECD countries from 1945 to 2017, we find that every 20 percent drop in the number of industrial jobs adds one more party on the left. We find a corresponding decline in policy moderation as the left fragments. In the United States and Britain, where majoritarian electoral rules limit party fragmentation, economic insecurity takes other forms including attacks on parties’ ability to formulate and implement moderate policies.
This chapter introduces a new theoretical framework that helps explain how access to credit and indebtedness shape social policy preferences. Credit markets privatize both risks and opportunities. They enable individuals to self-insure against social risks and to opt out of publicly provided social services, reaping the benefits of private, credit-funded alternatives in human capital (e.g., education) and financial assets (e.g., housing) with the expectation of economic gains and upward mobility. But indebtedness can also increase economic risks by making borrowers vulnerable to income volatility and income losses that threaten debt repayments. Using original survey data, this chapter documents considerable divergence of social policy preferences across countries (depending on the structure of the welfare state and credit regime), across households (depending on whether they borrow for consumption or investment), and across the political ideology spectrum (depending on people’s relative belief in personal responsibility and market efficacy).
Much scholarly attention has been given to the potentially disruptive distributional implications of new technologies in labor markets. Less explored is the way citizens as socially embedded individuals perceive and respond to technological transformation. This study fills this gap by exploring how welfare state institutions shape and are shaped by citizens’ perceptions of technological transformation. My analysis covering over 50 developed and developing countries finds that welfare state generosity is associated with a greater acceptance of technological change. I also provide evidence consistent with the expectation that labor market interventions of the welfare state have the potential to reduce the skill cleavage over technological transformation by mitigating the insecurity faced by the low-skilled. Additionally, citizens embracing technological transformation are more supportive of the welfare state than techno-skeptics are.
Rising economic insecurity in recent decades has focused attention on the importance of social welfare programs in managing household financial stability. Some governments are more effective than others in managing this outcome, and informal social institutions help explain why. Social capital is expected to shape economic security through multiple mechanisms, but whether the effect is to magnify or mitigate volatility is an open question. Part of the answer has to do with how social capital interacts with policy implementation, and whether it conditions the effectiveness of government spending. Evidence from the U.S. states from 1986 to 2010 fails to support a benevolent social capital thesis—not only is social capital associated with greater economic insecurity, there is no evidence that it improves social welfare effectiveness. However, greater spending on some social programs can mitigate the adverse impact of social capital on economic security.
In recent decades, there has been a gradual decline in working-class organisations, including social democratic parties and trade unions, and an increase in support for populist radical right parties across western democracies. These trends have a plausible common cause: an increase in labour market insecurity associated with deindustrialisation may cause disenchantment with establishment organisations and support for politicians who criticise them. In this article, I examine how individual labour market status interacts with labour market policies to affect attitudes towards trade unions and populist radical right parties. I find that individuals with insecure employment status become less likely to support trade unions and more likely to support populist radical right parties as employment protection for secure workers increases. This effect is offset somewhat by spending on active labour market policies. I find evidence for these predictions in data for 27 Organisation for Economic Co-Operation and Development countries from 1995 to 2009.
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