Essays in Political Economy: Drivers of Polarization
by Johannes Matzat
Date of Examination:2023-09-20
Date of issue:2023-10-12
Advisor:Prof. Dr. Axel Dreher
Referee:Prof. Dr. Krisztina Kis-Katos
Referee:Prof. Dr. Andreas Fuchs
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Abstract
English
This thesis contributes to our understanding of the increasing polarization of societies. The first chapter focuses on immigration inflows as driver of polarization. As societies are faced with an increasing number of immigrants, immigration has become a central and polarized topic of political discourse. This chapter leverages a shift-share instrument to assess the causal impact of U.S. immigrant inflows on political ideologies. It documents that migration increased the polarization of politicians campaigning for the House of Representatives between 1992 and 2016. Subsequently, it focuses on refugees enabled by novel data covering over 3 million individuals. The results echo those for immigrants and suggest that the difference in the moral justification for welcoming refugees does not translate into a different political reaction. The second chapter analyzes whether the arrival of fast internet unites or divides Indian villages. It leverages the largest rural government broadband initiative in the world that aims to connect every Indian village to the fiber-optic network. To identify the causal effect of rural broadband internet, this paper exploits spatial discontinuities, which arose in 2017, between villages getting connected early and late due to the staggered roll-out of the broadband initiative. The paper documents an increase in divisions along several dimensions: First, assaults and riots of supporters of the Hindu nationalist party increase; second, welfare benefits in Jharkhand are increasingly distributed along religious lines; third, in Jharkhand, non-Muslim villages vote for the Hindu nationalist party while Muslim villages vote for the secular parties. The third chapter examines the political influence of labor unions. The workplace is behind family and friends the area most important for political discussions and it is directly influenced by unions. There, they may change the ideological positions of both unionizing workers and their non-unionizing management. This paper analyzes the workplace-level impact of unionization on workers’ and managers’ political campaign contributions over the 1980-2016 period in the United States. In a difference-in-differences design, it finds that unionization leads to a leftward shift of campaign contributions. Unionization increases the support for Democrats relative to Republicans not only among workers but also among managers, which speaks against an increase in political cleavages between the two groups. These shifts are not driven by compositional changes of the workforce but are also visible at the individual level.
Keywords: Political Economy; Migration; Internet; Unions; Polarization