Structural economic changes and political realignment: a panel regression analysis on the impact of automation and globalization on political values

Political science literature shows a robust association between the disruptive impact of automation and globalization in advanced labor markets and individuals support for far-right parties. While economic insecurity brought by the decline of manufacturing jobs is usually designated as the main trigger of political discontent for globalization “losers”, several contributions refer to status loss as the main mechanism explaining the support of middle-class automation “losers” for the far right. However, little empirical research has been devoted to unpacking the causal mechanisms behind these phenomena. Moreover, existing literature usually refers to voting choices as proxies of new political demands, without investigating whether a profound change in values has occurred as a result of structural labor market transformations. The present work aims to provide a threefold contribution to the research on the political implications of automation and globalization. First, I test whether the success of nationalist parties among the “losers” of structural economic changes can be attributed to a value-based political realignment. Although political economy literature confines significant effects of economic hardships to contingent political preferences, I expect a deeper impact on political beliefs when individuals are challenged by a structural reorganization of the labor market. Particularly, drawing on cleavages literature, the present analysis enables to distinguish between possible shifts on the socioeconomic and cultural dimensions of political ideology. Secondly, the paper provides an empirical test of the mediating role of socioeconomic status in the relation between structural labor transformations and political stances. Lastly, the inclusion of both automation- and globalization-induced economic changes enables a comparative assessment of the political consequences of these transformations. I use panel data from Germany (SOEP), Switzerland (SHP), and the United Kingdom (BHPS-UKHLS) to track the impact of occupational trajectories on the political values of individuals originally employed in routine middle-skill occupations, offshorable professions, and tradable sectors. Four possible labor trajectories are considered for each group of “losers”: remaining in the same occupation/sector, unemployment, upward and downward mobility. The empirical strategy is complemented by a mediation analysis to test the intervening role of different measurements of socioeconomic status in the relation between labor mobility and political realignment. I posit that both structural economic changes have mainly induced a shift towards cultural conservativism among “losers”, although operated through different mechanisms. I expect automation “losers” to show more socially conservative values when retaining a routine occupation or slipping into low-skill non-routine occupations. A major part of this effect is expected to be mediated by status loss. On the contrary, I posit that globalization-related risks mainly contribute to the same ideological shift when “losers” exit the labor market or keep working in their occupation/sector, without a significant mediation of status.