Johanna Rickne, Stockholm University

Economic Losers and Political Winners: Sweden’s Radical Right

Abstract

We study the rise of the Sweden Democrats, a radical-right party that rose from negligible size in 2002 to Sweden’s third largest party in 2014. We use comprehensive data to study both its politicians (supply side) and voters (demand side). All political candidates for the party can be identified in register data, which also lets us aggregate individual social and economic conditions in municipalities or voting districts and relate them to the party’s vote share. We take a starting point in two key economic events: (i) a series of policy reforms in 2006-2011 that significantly widened the disposable- income gap between “insiders” and “outsiders” in the labor market, and (ii) the financial-crisis recession that doubled the job-loss risk for “vulnerable” vs “secure” insiders. On the supply side, the Sweden Democrats over-represent both losing groups relative to the population, whereas all other parties under-represent them, results which also hold when we disaggregate across time, subgroups, and municipalities. On the demand side, the local increase in the insider-outsider income gap, as well as the share of vulnerable insiders, are systematically associated with larger electoral gains for the Sweden Democrats. These findings can be given a citizen-candidate interpretation: economic losers (as we demonstrate) decrease their trust in established parties and institutions. As a result, some economic losers became Sweden-Democrat candidates, and many more supported the party electorally to obtain greater descriptive representation. This way, Swedish politics became potentially more inclusive. But the politicians elected for the Sweden Democrats score lower on expertise, moral values, and social trust - as do their voters which made local political selection less valence oriented.

Johanna Rickne is an Associate Professor in Economics at the Swedish Institute for Social Research at Stockholm University. She has previously worked at the Research Institute for Industrial Economics and Columbia University (SIPA). She has also held visiting positions at U.C. Berkeley, Harvard University, and Tokyo University. Her current research is in labor economics, political economics, and gender economics. Her articles have appeared in the American Economic Review, Quarterly Journal of Economics, and American Political Science Review.