Economic Distress and Support for Far-right Parties - Evidence from Sweden

Abstract

This paper studies the effects of economic distress on support for far-right parties. Using Swedish election data, I show that shocks to unemployment risk among unskilled native-born workers account for 31 percent of the increased vote share for the Swedish far-right party Sweden Democrats. The effect of unemployment risk on support for the Sweden Democrats is larger in areas with a high share of unskilled immigrants, and in areas with a low share of skilled immigrants. These findings are in line with theories suggesting that voters attribute their impaired economic status to immigration, due to labor market concerns. Furthermore, I find no effects on voting for other anti-EU and anti-globalization parties, challenging the notion that economic distress increases anti-globalization sentiment. Using detailed survey data, I present suggestive evidence of how increased salience of political issues related to immigration channels unemployment risk into support for far-right parties.

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