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The effect of income inequality on political polarization: Evidence from European regions, 2002–2014
Author(s) -
Winkler Hernan
Publication year - 2019
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/ecpo.12129
Subject(s) - endogeneity , gini coefficient , inequality , economic inequality , polarization (electrochemistry) , politics , demographic economics , instrumental variable , economics , immigration , income distribution , ideology , income inequality metrics , development economics , econometrics , political science , law , mathematical analysis , chemistry , mathematics
Abstract This article investigates whether income inequality leads to political polarization and provides new evidence that an increase in the Gini coefficient at the local level increases the probability of supporting a political party at the extreme left and right of the ideological distribution. Using individual data for 25 European countries from 2002 to 2014, I find that increasing inequality leads on average to more support for left‐wing parties. I also find that increasing inequality leads to more support for far‐right parties among older individuals. Support for far‐right parties seems to be driven by rising anti‐immigrant sentiments. The results are robust to different specifications, including an instrumental variable that addresses the endogeneity of income inequality.