How the left prospers from prosperity

Simen Markussen

European Journal of Political Economy, 2008, vol. 24, issue 2, pages 329-342

Abstract: This paper investigates the relationship between fluctuations in economic growth, unemployment, and voting along a left-right axis. I estimate a model that explains how political fluctuations are caused by economic fluctuations in the OECD countries. I find that higher economic growth causes a shift to the left of policy sentiments. I hold the provision of social insurance by the welfare state to be the key to understanding this relationship. I also find that the relationship changes over the sample period. I hold the tax increase needed to finance the expansion of the welfare state to be the reason for this.

Date: 2008

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Persistent link: http://EconPapers.repec.org/RePEc:eee:poleco:v:24:y:2008:i:2:p:329-342

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