Essays on inequality and political polarization: evidence from Spain

Jambrina Canseco, Beatriz (2023) Essays on inequality and political polarization: evidence from Spain. PhD thesis, London School of Economics and Political Science.

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Abstract

The political economy literature suggests that economic interests shape political preferences, implying that periods of economic turmoil are likely to translate into political polarization. In this sense, a rise in economic inequalities, both inter-personal and inter-territorial, has led to widespread discontent and resentment, susceptible to be channeled through the use of narratives into support for radical parties. The essays in this thesis contribute to the burgeoning literature on the links between both of these types of polarization. Read as a whole, they help to explain the turn towards the extremes in the Spanish political landscape. Nonetheless, the problems, lessons, and methodologies easily apply to other contexts. The first essay highlights the importance of narratives in shaping voting choices. Using machine learning, I track the main narratives present in local newspapers ahead of the last national election. While these narratives often did not align with the reality captured by socioeconomic statistics, they remain good predictors of radical voting patterns. Using spatial econometrics, I show that perceptions related to separatism, economic anxiety, and regional gaps played a key role in the rise of the radical right party VOX in Spain. I then focus on two of the economic drivers of the radical vote: unemployment and wage inequality. In the second essay, I revisit the classical question of whether unemployment leads to radical voting, providing empirical evidence that recent unemployment shocks have contributed to current political polarization in Spain. Using an instrumental variable strategy, I show that industrial unemployment favored the radical right, while unemployment upon first-time entry in the labor market boosted support for the radical left. These patterns perfectly match party narratives but remain hidden if one looks at the unemployed as a homogeneous group. The third essay describes the evolution of the real (adjusting for local costs of living) returns to university education in Spain since the years before the Great Recession. Despite relative stability in returns to university education (39-46%), I uncover large cohort gaps that predate the crisis, with younger workers receiving much lower returns on their university degrees than older workers. Workers over 35 with a tertiary degree earned 45% more than their lesser-educated counterparts, whereas those under 35 received a premium of only 30%. These gaps cannot be accounted for by differences in prior work experience. I also find evidence of increasing within-group wage inequality among the educated, a particularly prominent pattern among the young. Based on these findings, the paper studies the possibility that the evolution in returns to university is linked to an increase in the relative supply of tertiary-educated workers that has been unmatched by relative demand for high-skilled workers.

Item Type:	Thesis (PhD)
Additional Information:	© 2023 Beatriz Jambrina Canseco
Library of Congress subject classification:	H Social Sciences > HC Economic History and Conditions J Political Science > JC Political theory J Political Science > JN Political institutions (Europe)
Sets:	Departments > Geography and Environment
Supervisor:	Lee, Neil and Rodríguez-Pose, Andrés
URI:	http://etheses.lse.ac.uk/id/eprint/4614

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