Compensation, austerity and populism: Labor market spending and voting in 16 Western European countries

Abstract

There has been a dramatic rise in voting for populist parties in Europe over the past thirty years. We assess the role of government labor market policy in dampening or provoking populist sentiment. Drawing from a panel of 134 elections from 1990 to 2021 and pooled cross-sectional data from eleven waves of the European Social Survey, we find evidence that populist parties fared worse where countries provided more robust income support to workers experiencing unemployment. The effect was stronger among those individuals who had experienced unemployment and among current and former trade union members. This suggests that the welfare cuts and labor-market reforms pursued since the early 2000's may have alienated vulnerable segments of the population and driven them toward populist parties.