The electoral impact of the financial crisis: Evidence using district-level data

Do economic downturns increase voter support for left or right parties? In our empirical analysis, we combine fine-grained registry-data on the labor market impact of the crisis and how it varied across 5000 electoral districts, with district-level data on vote-shares for all major parties in Swedish parliamentary elections before and after the crisis. Because the impact was so diverse across districts, we can estimate the electoral impact of unemployment more efficiently than usual. Moreover, because the crisis was an external and unexpected shock to the Swedish economy, we argue that the selection bias that is usually inherent in estimating the electoral impact of unemployment is mitigated. We find that the electoral impact of crisis-induced unemployment was large, benefiting right parties.