Cobbler, Stick to Your Last? Social Democrats’ Electoral Returns from Labour Market Policy

Abstract

AbstractIn this article, we examine how labour market policy interventions, notably short-time work (STW), affect voting behaviour in times of electoral downturn. We use the 2009 German general elections as an example. This is a particularly interesting case because the grand coalition of Christian democrats (CDU/CSU) and social democrats (SPD) was up for re-election against the backdrop of a major recession following the 2007/08 financial crisis and extensively used STW policies to counteract rising unemployment. Interestingly, STW policy and unemployment vary considerably between regions. We exploit this variance to create a unique dataset that combines regional information on STW policy and unemployment in 299 German electoral constituencies with individual data from the post-election survey. Our results show that especially the SPD profited from high STW rates at constituency level on election day, but this policy was insufficient to preclude the major losses social democrats suffered during the election. More generally, our results indicate that classic labour market policy can generate electoral support for social democratic parties, even as a “junior partner” in a grand coalition. Nevertheless, it remains unclear whether such support is sufficient for electoral victories.