How Technological Change Affects Regional Electorates

• BSE Working Paper: 1269 | July 21
• Keywords: technological change , political preferences , Voters , automation , robots , occupational determinants of plitical preferences
• JEL codes: P16, D72, O33, J31
• technological change
• political preferences
• Voters
• automation
• robots
• occupational determinants of plitical preferences

This paper challenges the common perception that automation and digitalization generally reduce employment and primarily result in political discontent. Drawing on fine-grained labor market data from West Germany and shift-share instruments combined with two-way fixed-effect panel models, we study how technological change affects regional electorates. We show that the expected decline in manufacturing and routine jobs in regions with higher robot adoption or higher investment in information and communication technology (ICT) was in fact more than compensated by parallel employment growth in the service sector and cognitive non-routine occupations. This change in the regional composition of the electorate has important political implications as workers trained for these new sectors typically hold progressive political values. Consequentially, local advances in technology are associated with higher vote shares for progressive parties. This finding adds important nuance to the popular narrative that technological change fuels radical right voting.