Working Paper: CEPR ID: DP16572
Authors: Joseph Zeira
Abstract: Recent decades have seen dramatic developments in Western countries, which happened in a number of areas, political, economic and social. These are the growing support for extreme political parties, mainly on the right. A shift in production specialization in the West, mainly in the US, from manufacturing to global services. The third change is the rapid spread of high education, which increased significantly the educated class since the end of WWII. This paper claims that these three processes have strong relations between them and affect one another significantly.
Keywords: populism; trade; specialization; globalization; public education
JEL Codes: E02; F6; H4; I24; N10; O3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Expansion of education (I24) | Rise of educated class (N93) |
| Rise of educated class (N93) | Decline of traditional political parties (D72) |
| Rise of educated class (N93) | Rise of populist movements (F69) |
| Dissatisfaction among blue-collar workers (J59) | Support for populist politics (D72) |
| Economic shift from manufacturing to global services (O14) | Reduced demand for blue-collar labor (J29) |
| Reduced demand for blue-collar labor (J29) | Alienation and support for populist politics (P26) |
| Decline of manufacturing jobs (F66) | Political shifts (P39) |
| Expansion of education (I24) | Political dynamics (D72) |
| Economic specialization (F69) | Political dynamics (D72) |