Explaining the rise of populism in European democracies 1980–2018: The role of labor market institutions and inequality

Objectives This article aims to find country‐level factors that explain the rise of populist parties in European democracies. While populism is often connected to inequality, we not that right‐wing populist parties tend to thrive on fear, including fear of job loss. If flexible labor markets mean that unemployment is dedramatized because finding a new job is easier, labor market flexibility could dampen populism and inequality may be less important. Methods We run country‐level fixed effects regressions on populist party vote shares in 26 European countries from 1980 to 2018. We use two different classifications of right‐wing and left‐wing populist parties and control for employment protection strictness as measured by OECD, Gini coefficients of disposable income, and a large set of control variables. Results Unemployment is positively associated with left‐wing populism. Strict employment protection is positively associated with right‐wing populism. Gini inequality of income is unrelated to (both types of) populism. Conclusion Strong employment protection and low‐income inequality may not be the most efficient way to combat right‐wing populism. A strategy that promotes flexible labor markets, and job upgrading may be an alternative. More research on the link between labor market institutions and (in particular, right‐wing) populism is needed.