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Economic Insecurity Increases Polarization and Decreases Trust
(with Joanna Bryson).
[Abstract]
The causes of polarization and distrust are not well understood, and subject to competing hypotheses. Here we test empirically whether economic precarity is a cause. Precarity is thought to increase both political polarization and distrust due to individual risk aversion. We empirically test predictions of this hypothesis globally at both macro, country and micro, individual levels. Further, we exploit exogenous variation in European individuals' exposure to Chinese import shocks to establish a causal relation between economic insecurity and decreasing trust. We find that economic insecurity, in the form of income inequality and unemployment at the macro-level, and perceived economic insecurity at the individual level, are associated with increases of affective polarization, and of public distrust. Our work indicates the importance of social safety nets for maintaining social cohesion.
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Climate Exposure Drives Firm Political Behavior: Evidence from Earnings Calls and Lobbying Data
(with Christian Baehr and Fiona Bare).
[Abstract]
When do firms engage in climate politics? Expected impacts drive political activity. Specifically, we argue that regulatory concerns, business opportunities, and physical risks activate policy preferences and lobbying efforts. We measure firm-level exposure to opportunity, regulatory, and physical aspects of climate change based on discussion in quarterly earnings call transcripts for 11800+ publicly traded firms between 2001 and 2020. We estimate the effect of climate exposure on climate lobbying instances (extensive margin), expenditure (intensive margin), and targets (political entities). We find that more exposed companies, especially in terms of opportunities and regulation, are more likely to lobby. The type of climate exposure, both absolute and relative to industry peers, dictates whether firms lobby, how much they spend on lobbying, and their choice of government target. Taken together, our findings demonstrate the importance of disaggregating firm-level perceptions of climate impacts to understand patterns in political activity.
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The Energy Transition and Political Polarization Along Occupational Lines
(with Hanno Hilbig and Erik Voeten).
[Abstract]
The green transition creates economic winners and losers. To what extent has the energy transition resulted in political polarization along occupational lines? We examine this question in the context of Germany, a country that has adopted some of the most far-reaching energy transition policies and that also has substantial employment in heavy emissions occupations. The far-right AfD party started campaigning as the only party opposing energy transition policies in 2016. Using a difference-in-differences design, we show that, after the 2013 election, AfD support increased in counties with larger shares of employment in polluting occupations. We then use individual-level panel data to show that since 2016, individuals in polluting occupations have become significantly more likely to identify with the far-right. We further demonstrate that these findings are not due to simultaneous political changes, most notably (i) differential activation of xenophobia after 2015 and (ii) losses in manufacturing employment. This suggests that far-right parties have benefited from concerns over present and future energy transition policies.
