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Why far right parties do well at times of crisis: the role of labour market institutions

Vlandas, T. and Halikiopoulou, D., (2016) Why far right parties do well at times of crisis: the role of labour market institutions. Working Paper. European Trade Union Institute ISSN 1994-4446

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The far right is on the rise in many western and eastern European countries. The obvious culprit for this rise is the 2008 Eurozone crisis, and indeed a large body of literature suggests that economic malaise prompts far right party support. This conventional wisdom, however, is not consistent with cross-national patterns of unemployment and far right votes in the last three EP elections. To solve this puzzle we argue that it is specific labour market policies rather than the economic crisis itself that are more likely to facilitate the rise of the far right. In many countries governments have deregulated employment protection legislation and reduced unemployment benefits in the last three decades. But it was precisely these labour market institutions that offered protection from the insecurity and deprivation that economic malaise imposes on societies. We test our argument on the last three EP elections and find that unemployment and GDP growth have not played a role while labour market institutions had both a direct impact on far right support and an indirect impact in limiting the effect of unemployment. Unemployment benefits have both a direct association with far right support and an indirect association in limiting the effect of unemployment: where unemployment benefits are generous, unemployment has no association with far right, but where they are not, unemployment is associated with higher far right support. EPL only has an indirect association conditional on unemployment benefits. Where unemployment benefits are low, EPL mediates the impact of unemployment benefits, but where unemployment benefits are generous, there is no mediating impact of EPL. This suggests that the policies of austerity are likely to exacerbate support for the far right in EP elections therefore undermining the European integration project itself.

Item Type:Report (Working Paper)
Divisions:Arts, Humanities and Social Science > School of Politics, Economics and International Relations > Politics and International Relations
ID Code:65706
Publisher:European Trade Union Institute


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