The political consequences of technological change that benefits low-skilled workers

Abstract

Technological change often increases demand for high-skilled jobs, with low-skilled losers turning to the populist right in response. The political effects of technological change that increases demand for low-skilled workers are largely unknown. The growth of the salmon fish-farming industry in rural Norway improved the labor-market situation for low-skilled workers, and we find that support for the populist right-wing party increased in municipalities that benefitted from the industry growth. The electoral change is due to a right-wing shift on the economic, but not the cultural dimension. Our results support political economy frameworks that point to lower demand for state interventions after positive labor market shocks, but raise the question of in what contexts support for populism will decline.