Long-run Political Change after the Great Recession

What are the long-term political consequences of economic crises? We assess the enduring impact of the Great Recession on US political outcomes. Using a difference-in-differences approach, we find that counties with larger unemployment shocks experienced a sustained increase in Democratic vote shares in Congressional elections and a durable shift in campaign contributions toward Democrats. Conversely, we find no evidence that the shock fueled support for Donald Trump or the Tea Party. We test five potential mechanisms: persistent economic decline, demographic changes, candidate ideology, fiscal compensation, and voter beliefs. We find little evidence for structural or supply-side explanations. Instead, our results are most consistent with the view that the recession lowered expectations for upward mobility, likely increasing support for redistribution. While we are collecting further evidence to validate this specific channel, our findings suggest that severe economic shocks can trigger durable leftward shifts.