IDEAS home Printed from https://ideas.repec.org/p/zbw/vfsc18/181598.html
   My bibliography  Save this paper

Inequality and Extremist Voting: Evidence from Germany

Author

Listed:
  • Dorn, Florian
  • Fuest, Clemens
  • Immel, Lea
  • Neumeier, Florian

Abstract

This paper studies the impact of economic inequality on political polarization. Using a unique dataset covering different measures of regional income inequality as well as federal and state election outcomes at the county level in Germany, we investigate whether inequality influences the share of votes for right-wing and left-wing extremist parties using instrumental variable estimation. Our results suggest that an increase in income inequality has a sizeable influence on the support for extremist parties. The poorer a county is compared to the national average, the higher is the share of votes both nationalist and leftist parties receive. Our findings thus indicate that the rise in economic inequality may be a threat to political stability.

Suggested Citation

  • Dorn, Florian & Fuest, Clemens & Immel, Lea & Neumeier, Florian, 2018. "Inequality and Extremist Voting: Evidence from Germany," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181598, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc18:181598
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/181598/1/VfS-2018-pid-13797.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. John V. Duca & Jason L. Saving, 2016. "Income Inequality and Political Polarization: Time Series Evidence Over Nine Decades," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 445-466, September.
    2. David Autor & David Dorn & Gordon Hanson & Kaveh Majlesi, 2020. "Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure," American Economic Review, American Economic Association, vol. 110(10), pages 3139-3183, October.
    3. AndrewE. Clark & Claudia Senik, 2010. "Who Compares to Whom? The Anatomy of Income Comparisons in Europe," Economic Journal, Royal Economic Society, vol. 120(544), pages 573-594, May.
    4. Patrick Royston, 2007. "Multiple imputation of missing values: further update of ice, with an emphasis on interval censoring," Stata Journal, StataCorp LP, vol. 7(4), pages 445-464, December.
    5. Aggeborn, Linuz & Persson, Lovisa, 2017. "Public Finance and Right-Wing Populism," Working Paper Series 1182, Research Institute of Industrial Economics.
    6. Sascha Becker & Thiemo Fetzer & Dennis Novy & Sascha O. Becker, 2017. "Who Voted for Brexit?," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(04), pages 03-05, December.
    7. Sascha O Becker & Thiemo Fetzer & Dennis Novy, 2017. "Who voted for Brexit? A comprehensive district-level analysis," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(92), pages 601-650.
    8. Funke, Manuel & Schularick, Moritz & Trebesch, Christoph, 2016. "Going to extremes: Politics after financial crises, 1870–2014," European Economic Review, Elsevier, vol. 88(C), pages 227-260.
    9. Andrews,Donald W. K. & Stock,James H. (ed.), 2005. "Identification and Inference for Econometric Models," Cambridge Books, Cambridge University Press, number 9780521844413.
    10. Han Werts & Peer Scheepers & Marcel Lubbers, 2013. "Euro-scepticism and radical right-wing voting in Europe, 2002–2008: Social cleavages, socio-political attitudes and contextual characteristics determining voting for the radical right," European Union Politics, , vol. 14(2), pages 183-205, June.
    11. Antràs, Pol & de Gortari, Alonso & Itskhoki, Oleg, 2017. "Globalization, inequality and welfare," Journal of International Economics, Elsevier, vol. 108(C), pages 387-412.
    12. Alesina, Alberto & La Ferrara, Eliana, 2005. "Preferences for redistribution in the land of opportunities," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 897-931, June.
    13. Becker, Sascha O. & Fetzer, Thiemo, 2016. "Does Migration Cause Extreme Voting?," CAGE Online Working Paper Series 306, Competitive Advantage in the Global Economy (CAGE).
    14. Romer, Thomas, 1975. "Individual welfare, majority voting, and the properties of a linear income tax," Journal of Public Economics, Elsevier, vol. 4(2), pages 163-185, February.
    15. Alan B. Krueger & Jörn-Steffen Pischke, 1997. "A Statistical Analysis of Crime against Foreigners in Unified Germany," Journal of Human Resources, University of Wisconsin Press, vol. 32(1), pages 182-209.
    16. Cruces, Guillermo & Perez-Truglia, Ricardo & Tetaz, Martin, 2013. "Biased perceptions of income distribution and preferences for redistribution: Evidence from a survey experiment," Journal of Public Economics, Elsevier, vol. 98(C), pages 100-112.
    17. Kuhn, Andreas, 2011. "In the eye of the beholder: Subjective inequality measures and individuals' assessment of market justice," European Journal of Political Economy, Elsevier, vol. 27(4), pages 625-641.
    18. Atif Mian & Amir Sufi & Francesco Trebbi, 2014. "Resolving Debt Overhang: Political Constraints in the Aftermath of Financial Crises," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(2), pages 1-28, April.
    19. Armin Falk & Andreas Kuhn & Josef Zweimüller, 2011. "Unemployment and Right‐wing Extremist Crime," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(2), pages 260-285, June.
    20. Sinn, Hans-Werner, . "The New Systems Competition: YRJÖ Jahnsson Lectures," Monographs in Economics, University of Munich, Department of Economics, number 19614, November.
    21. Clément Malgouyres, 2017. "Trade Shocks and Far-Right Voting: Evidence from French Presidential Elections," RSCAS Working Papers 2017/21, European University Institute.
    22. Italo Colantone & Piero Stanig, 2018. "The Trade Origins of Economic Nationalism: Import Competition and Voting Behavior in Western Europe," American Journal of Political Science, John Wiley & Sons, vol. 62(4), pages 936-953, October.
    23. Engelhardt, Carina & Wagener, Andreas, 2014. "Biased Perceptions of Income Inequality and Redistribution," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100395, Verein für Socialpolitik / German Economic Association.
    24. Leah Boustan & Fernando Ferreira & Hernan Winkler & Eric M. Zolt, 2013. "The Effect of Rising Income Inequality on Taxation and Public Expenditures: Evidence from U.S. Municipalities and School Districts, 1970–2000," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1291-1302, October.
    25. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    26. de Bromhead, Alan & Eichengreen, Barry & O'Rourke, Kevin H., 2013. "Political Extremism in the 1920s and 1930s: Do German Lessons Generalize?," The Journal of Economic History, Cambridge University Press, vol. 73(2), pages 371-406, June.
    27. Eric Brunner & Stephen L. Ross & Ebonya Washington, 2011. "Economics and Policy Preferences: Causal Evidence of the Impact of Economic Conditions on Support for Redistribution and Other Ballot Proposals," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 888-906, August.
    28. Paola Giuliano & Antonio Spilimbergo, 2014. "Growing up in a Recession," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(2), pages 787-817.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Endrich, Marek, 2020. "A Window to the World: The long-term effect of Television on Hate Crime," ILE Working Paper Series 33, University of Hamburg, Institute of Law and Economics.
    2. Gian Italo Bischi & Federico Favaretto & Edgar J. Sanchez Carrera, 2022. "Long-term causes of populism," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 17(1), pages 349-377, January.
    3. Federico Favaretto & Donato Masciandaro, 2022. "Populism, financial crises and banking policies: Economics and psychology," Scottish Journal of Political Economy, Scottish Economic Society, vol. 69(4), pages 441-464, September.
    4. Hernan Winkler, 2019. "The effect of income inequality on political polarization: Evidence from European regions, 2002–2014," Economics and Politics, Wiley Blackwell, vol. 31(2), pages 137-162, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Florian Dorn & Clemens Fuest & Lea Immel & Florian Neumeier, 2020. "Economic Deprivation and Radical Voting: Evidence from Germany," ifo Working Paper Series 336, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    2. Yann Algan & Sergei Guriev & Elias Papaioannou & Evgenia Passari, 2017. "The European Trust Crisis and the Rise of Populism," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(2 (Fall)), pages 309-400.
    3. repec:hal:spmain:info:hdl:2441/2i9jel1usb85nr2j7tejsaldfu is not listed on IDEAS
    4. repec:hal:spmain:info:hdl:2441/1divsbu8t888r9vqektjbmlqoa is not listed on IDEAS
    5. Hernan Winkler, 2019. "The effect of income inequality on political polarization: Evidence from European regions, 2002–2014," Economics and Politics, Wiley Blackwell, vol. 31(2), pages 137-162, July.
    6. David Autor & David Dorn & Gordon Hanson & Kaveh Majlesi, 2020. "Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure," American Economic Review, American Economic Association, vol. 110(10), pages 3139-3183, October.
    7. Frédéric Docquier & Lucas Guichard & Stefano Iandolo & Hillel Rapoport & Riccardo Turati & Gonzague Vannoorenberghe, 2022. "Populism and the Skill-Content of Globalization: Evidence from the Last 60 Years," CESifo Working Paper Series 10068, CESifo.
    8. Sebastian Doerr & Stefan Gissler & José‐Luis Peydró & Hans‐Joachim Voth, 2022. "Financial Crises and Political Radicalization: How Failing Banks Paved Hitler's Path to Power," Journal of Finance, American Finance Association, vol. 77(6), pages 3339-3372, December.
    9. Amory Gethin & Clara Martínez-Toledano & Thomas Piketty, 2022. "Brahmin Left Versus Merchant Right: Changing Political Cleavages in 21 Western Democracies, 1948–2020," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(1), pages 1-48.
    10. Sergei Guriev & Elias Papaioannou, 2022. "The Political Economy of Populism," Journal of Economic Literature, American Economic Association, vol. 60(3), pages 753-832, September.
    11. Sebastian Doerr & Stefan Gissler & José-Luis Peydró & Hans-Joachim Voth, 2018. "From finance to fascism," Economics Working Papers 1651, Department of Economics and Business, Universitat Pompeu Fabra, revised Nov 2020.
    12. Voth, Hans-Joachim & Doerr, Sebastian & Gissler, Stefan & Peydró, José-Luis, 2018. "Financial crises and political radicalization: How failing banks paved Hitler's path to power," CEPR Discussion Papers 12806, C.E.P.R. Discussion Papers.
    13. Choi, Gwangeun, 2019. "Revisiting the redistribution hypothesis with perceived inequality and redistributive preferences," European Journal of Political Economy, Elsevier, vol. 58(C), pages 220-244.
    14. Jeffrey, Karen, 2021. "Automation and the future of work: How rhetoric shapes the response in policy preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 417-433.
    15. Yann Algan & Sergei Guriev & Elias Papaioannou & Evgenia Passari, 2017. "The European Trust Crisis and the Rise of Populism," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(2 (Fall)), pages 309-400.
    16. Giray Gozgor, 2020. "The Role of Economic Uncertainty in Rising Populism in the EU," CESifo Working Paper Series 8499, CESifo.
    17. Christian Dippel & Robert Gold & Stephan Heblich & Rodrigo Pinto, 2017. "Instrumental Variables and Causal Mechanisms: Unpacking the Effect of Trade on Workers and Voters," CESifo Working Paper Series 6816, CESifo.
    18. Maurice Obstfeld, 2021. "Globalization and nationalism: Retrospect and prospect," Contemporary Economic Policy, Western Economic Association International, vol. 39(4), pages 675-690, October.
    19. Michael R. Strain & Stan Veuger, 2022. "Economic shocks and clinging," Contemporary Economic Policy, Western Economic Association International, vol. 40(3), pages 456-475, July.
    20. Lechler, Marie, 2019. "Employment shocks and anti-EU sentiment," European Journal of Political Economy, Elsevier, vol. 59(C), pages 266-295.
    21. Andreoli, Francesco & Olivera, Javier, 2020. "Preferences for redistribution and exposure to tax-benefit schemes in Europe," European Journal of Political Economy, Elsevier, vol. 63(C).
    22. O’Rourke, Kevin Hjortshøj, 2019. "Economic History and Contemporary Challenges to Globalization," The Journal of Economic History, Cambridge University Press, vol. 79(2), pages 356-382, June.

    More about this item

    Keywords

    Inequality; political polarization; extremist voting; Germany;
    All these keywords.

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:vfsc18:181598. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/vfsocea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.