The Political Consequences of Technological Change that Increases Demand for Low-Skilled Jobs
PS9-1
Presented by: Henning Finseraas
Recent technological changes have increased the relative demand for high-skilled jobs. Papers on the political effects of these changes argue that losers have turned to the populist right. We contribute to the literature by examining the political effects of the growth of the salmon fish farming industry in Norway, which created new tasks and more demand for low-skilled labour in local labour markets. We document the labour market effects and ask whether the positive development has shifted the local support for parties such as the Progress Party. To study this we use an Instrumental Variables approach, leveraging that geographic characteristics determine the local feasibility of salmon fish farming. Despite a positive development for low-skilled workers, we find political effects that are quite similar to those in the ``left-behind'' literature, as support for the Progress Party increased. Our results show that this is due to a right-wing shift on the economic, rather than the cultural, dimension. We interpret the results in light of the structure of party competition in Norway.