Past Exposure to Macroeconomic Shocks and Populist Attitudes in Europe

This paper explores the interplay between past exposure to macroeconomic shocks and populist attitudes. We document that individuals who experienced a macroeconomic shock during their impressionable years (between 18 and 25 years of age), are currently more prone to voting for populist parties, and manifest lower trust both in national and European institutions. We use data from the European Social Survey (ESS) to construct the differential individual exposure to macroeconomic shocks during those years. Our findings suggest that it is not only exposure to current economic shocks that matters (see e.g., \citet{guiso2020economic}) but also past exposure to economic recessions, which has a persistent effect on the rise of populism. Analytically, past economic shocks are associated with a fall in trust in national and European institutions and a rise in anti-immigrant attitudes. Interestingly, the interplay between the two, i.e., past and current exposure to economic shocks, has a mitigating effect on the rise of populism, meaning that individuals who were exposed to economic shocks in the past are less likely to manifest populist attitudes when faced with a current crisis.