Working Paper: CEPR ID: DP13846
Authors: Thiemo Fetzer
Abstract: This paper documents a significant association between the exposure of an individual or area to the UK government’s austerity-induced welfare reforms begun in 2010, and the following: the subsequent rise in support for the UK Independence Party, an important correlate of Leave support in the 2016 UK referendum on European Union membership; broader individual-level measures of political dissatisfaction; and direct measures of support for Leave. Leveraging data from all UK electoral contests since 2000, along with detailed, individual-level panel data, the findings suggest that the EU referendum could have resulted in a Remain victory had it not been for austerity.
Keywords: Political Economy; Austerity; Globalization; Voting; EU
JEL Codes: H2; H3; H5; P16; D72
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Austerity cuts (E65) | Increased support for UKIP (F36) |
| Austerity cuts (E65) | Increased political dissatisfaction (D72) |
| Increased political dissatisfaction (D72) | Support for leave campaign (K16) |
| Austerity cuts (E65) | Perception that votes do not matter (D72) |
| Perception that votes do not matter (D72) | Support for leave campaign (K16) |
| Austerity cuts (E65) | Changes in political preferences (D72) |