EUROSCEPTICISM: ANOTHER BRICK IN THE WALL

by Claudia Biancotti*, Alessandro Borin*, Elisa Macchi§ and Michele Mancini*

Abstract

Euroscepticism, or disaffection with the European Union (EU), has been increasing in most EU member states in the past few years. Based on a new dataset and methodology that combines household-level data, manifestos of political parties and voting records from the EU Parliament, we find that opposition to the EU shares determinants and dynamics with the broader aversion to international economic integration (both in its trade and labour mobility dimensions) that is now widespread in some socio-demographic groups across advanced countries. This stands to reason: for EU citizens, EU membership is the most immediate incarnation of international economic integration as it implies free circulation of people, goods, services, and capital across national borders. Euroscepticism is highest among “globalisation losers”: low-skill manufacturing workers, the less educated, and those who feel that their income is not adequate. Worsening economic conditions, both at the individual and at the macro level, turn out to be a remarkable trigger of the rise of the anti-EU sentiment and, more in general, of the opposition to globalization.

JEL Classification: D72, F14, H11 Keywords: euroscepticism; globalisation; international economic integration; economic vote.

May 2017

Contents

1. Introduction ................................................................................................................................................... 2

2. Related literature ........................................................................................................................................... 6

3. Data and descriptive evidence ....................................................................................................................... 8

3.1 Data ............................................................................................................................................................. 8

3.2 Descriptive Evidence ................................................................................................................................... 9

4. The determinants of anti economic integration sentiment and voting ......................................................... 15

5. Broader anti-economic integration sentiment in political preferences ........................................................ 22

6. Conclusions ................................................................................................................................................. 26

Appendix ......................................................................................................................................................... 28

References ....................................................................................................................................................... 31

* Bank of Italy § University of Zurich

1

1. Introduction1

Over the past few years, anti-establishment ideas have gained traction in advanced economies. In

some countries, their standard bearers are political parties that have existed for some time, but were

previously shunned by the mainstream. Elsewhere, new formations have sprung up to protest the status quo,

in some cases positioning themselves at the far right or the far left of the political spectrum, in others

channelling dissatisfaction through slogans that defy traditional left-right classifications. A sizable literature

in economics and political sciences has emerged to attempt an explanation, consolidating a narrative.

Globalisation and technological transformation have created winners and losers, as gains from trade

liberalisation, international capital/labour mobility and technical progress have been unequally distributed

among the population; the financial crisis has made things worse. Losers have held traditional political

parties responsible; they have either stopped voting or turned to “radical” and/or “populist” parties,2 i.e.

those that promise drastic changes in the status quo and claim to represent the interests of the people against

the elite.

Anti-establishment platforms have won consensus by promising to restore the social status of the

“common man”, protecting him against threats as diverse as the negative consequences of trade liberalisation

on jobs, the dangers of a multi-ethnic society, the corruption of those in power, and external “enemies”

ranging from Muslims to the United Nations. The International Monetary Fund (2017) summarises this trend

as an increasing “pressure for inward-looking policies”, i.e. mostly a demand for restrictions on international

trade and immigration.

Data from both sides of the Atlantic suggest that this mechanism has been at work, among other

things, in bringing about the polarization of American congressional politics and presidential elections, the

Brexit vote in the UK, the electoral success of radical left-wing parties like Syriza in Greece and Podemos in

Spain, and the electoral gains of the nationalistic far right in some European countries. In this paper we

analyse how it played out through the unique lens of the rise of euroscepticism, or growing disaffection with

the European Union (EU) among citizens of its member states.

For about 500 million people living in twenty-eight countries,3 EU membership is the most

immediate incarnation of international economic integration. The cornerstone of the European project lies in

the ‘four freedoms’: free movement of people, goods, services and capital (Treaty Establishing the European

Economic Community, 1957). Eurostat data shows that in 2015 intra-EU trade in goods amounted to more

1 We would like to thank Pietro Catte, Riccardo Cristadoro, Eugenio Gaiotti, Giuseppe Parigi and Giovanni Veronese for their comments, and Flavia Tonelli for her assistance in data collection. The views here expressed are those of the authors and should not be attributed to the Bank of Italy. 2 In the political science literature, a difference is often made between “radical” and “extremist” parties in democracies. The former want to change the status quo in fundamental ways, but do not challenge democracy per se; the latter share the anti-establishment stance and are anti-democratic. For the sake of simplicity, we do not make this distinction here. 3 Throughout the paper, we include the United Kingdom in the EU, as it is still technically a member; besides, all of our data refers to years prior to the Brexit vote. 2

than EUR 3,072bn, absorbing 63% of all exports of member states; intra-EU migration accounted for about

one third of total migration to member states.

Even in relationships with the rest of the world, EU is synonym with openness. The founding treaties

posit that the Union negotiates trade agreements as a bloc, and in doing so it has traditionally been one of the

strongest advocates for global integration (Figure 1, panel A), even as all other major players took a step

back after the financial crisis (Figure 1, panel B). As a result, not only does the EU apply one of the lowest

Most Favourite Nation (MFN) average tariff rate among the WTO members, but it also maintains

Preferential Trade Agreements (PTA) with a large number of advanced and emerging economies (Figure 2).

Figure 1

Preferential Trade Agreements (PTAs) signed (or under negotiation) by major economies (number)

Source: own elaboration on Design of Trade Agreements Database (DESTA) and WTO RTA-IS

Figure 2

Preferential Trade Agreements of the EU

Source: own elaboration on Design of Trade Agreements Database (DESTA) and WTO RTA-IS.

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Negotiations started since 2007, not signedSigned since 2007

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While policies on migration from outside the EU are the legal responsibility of member states, non-

EU migrants that enter any EU country subsequently enjoy free circulation, within some limits, in the

Schengen area. Moreover, some EU laws, such as the Dublin Regulation,4 set substantial constraints on the

immigration policies implemented by member countries.

In light of all this, it is not surprising that the tensions feeding opposition to global economic

integration would also yield mistrust of the EU. Indeed, aggregate country-level data collected by the Pew

Research Center show that, in most EU countries, euroscepticism correlates with opposition to international

trade and immigration, although different member states show somewhat differentiated patterns across these

three dimensions (Figure 3).5

Opposition to EU integration may also have causes that go beyond anti-trade and anti-immigration

sentiment, as EU institutions are responsible for a much broader range of economic and non-economic

issues. There are other factors as well that make the EU an easy target for protest movements. The EU is

founded on a voluntary transfer of sovereignty from states to a supranational institution; pitting national

interests against the will of a distant technocracy has paid political dividends, especially whenever the EU

mandated measures of fiscal austerity.

Figure 3

Euroscepticism and opposition to trade and immigration (percentage of respondents)

Source: authors’ calculations on Pew Research Center data, available at http://www.pewglobal.org/category/datasets/ Note: panel A reports observations from Britain, Bulgaria, Czech Republic, France, Germany, Italy, Poland, Slovakia and Spain, for various year, ranging from 2007 to 2014 (unbalanced panel); each data point is a country-year observation. Data in panel B refer to 2014.

4 The Dublin Regulation is the European Union law that establishes which nation is responsible for the examination of the asylum applications within the EU. The current regulation (No. 604/2013) came into force in July 2013, but the so called “Dublin regime” was originally established in 1990. The general principle of the Dublin regime is that the state through which the asylum seeker first entered the EU is supposed to deal with the application, although the regulation takes into account other issues such as family ties and health conditions. 5 For example, Greece EU opposition in 2014 is strong, while opposition to trade is very low, since this country features a low degree of exposure to international competition.

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Poland Immigrants are aburden

Trade causes joblosses

Unfavorableopinion of the EU

4

In an effort to understand how euroscepticism relates to the broader opposition to globalisation, we

ask the following questions: how does the rise of euroscepticism correlate with increasing anti-trade and anti-

immigration sentiment? What are the main socio-economic traits of eurosceptics? Are these the same that

tend to be associated with the populist vote? We try to answer based on three types of data: i) household-

level information from seventeen EU countries over the 2004-2014 period, covering a wide array of socio-

demographic and economic variables, as well as sentiment towards European integration and political

preferences; ii) data covering where European political parties stood on a variety of issues over the same

period; iii) voting records for members of the European parliament between 2014 and early 2017.

These disparate datasets show that sentiment towards European integration has worsened in most of

the EU, with the notable exception of Germany. At the individual level, the traits associated with

euroscepticism differ little from those that are generally attributed to globalisation losers: wariness of the EU

is highest among low-skill workers, especially in manufacturing; older cohorts; those unsatisfied with their

income; those who consume large amounts of entertainment TV; and those who declare that they distrust

politicians. These characteristics predict euroscepticism both at the beginning and at the end of our

observation period.

A demand-side and a supply-side component appear to compound each other. On the demand side,

when pooling individual-level data across the whole period, the worsening of economic conditions at the

macro level over time emerges per se as a driver of increasing euroscepticism; when looking at each year

separately, the impact of our predictors is remarkably stable in terms of direction, but becomes stronger in

terms of intensity as the financial crisis hits and growth rates falter in most countries. This is consistent with

the idea that, when times are tough, those who are losing the most become even angrier at targets they

already disliked, and more likely to demand a change of direction. On the supply side, party manifestos and

actual voting records of elected representatives show that today anti-establishment parties, both on the left

and the right, jointly emphasize the anti-EU and anti-trade elements of their programs; if they are on the

right, they also underline anti-immigration proposals. It is likely that party officials were able to read the

mood of their potential voters, picking buzzwords that resonated with their beliefs. In equilibrium, intensified

grievances have met a polarized political offer, resulting in strong electoral performances of populists.

Individual traits that correlate with euroscepticism also predict the preference for anti-trade parties, and

actual anti-trade voting behaviour on the part of representatives of these parties in the European Parliament.

These results suggest that euroscepticism is, at least in part, a local manifestation of the broader backlash

against international economic integration that is sweeping through most advanced economies.

The paper is structured as follows. Section 2 provides a review of the related literature. Section 3

introduces the data, and provides some descriptive evidence on two key issues: the evolution of

euroscepticism and general political preferences at the individual level, and how these political preferences

translate into the policy bundles offered by political parties with respect to international economic integration

5

(EU, trade agreements, immigration). Section 4 illustrates our results on the determinants of individual-level

euroscepticism, in an effort to see how this relates to the traits commonly associated with globalisation and

technology losers. Section 5 aims to evaluate how groups that are particularly exposed to external economic

shocks react to political programs centered on anti-EU, anti-immigration and anti-trade rhetoric. Section 6

concludes. The Appendix provides further technical details.

2. Related literature

This paper draws on a vast literature concerned with how rising within-country inequality in

advanced economies affects the political process, with particular reference to the success of anti-

establishment ideas and the electoral gains of populist parties.

Income inequality increased in most advanced economies between the 1980s and the late 2000s

(OECD, 2011); the reasons have been a matter of intense debate, with conflicting results especially on the

role played by globalisation (Jaumotte et al., 2013; Helpman, 2016). The increasing skill premium observed

in labour markets (Autor, 2014; Crivellaro, 2016), perhaps the central determinant of rising inequality, is

likely to be at least in part a consequence of trade openness and the mobility of production factors (Antràs et

al., 2016; Helpman et al., 2017), but it is also closely linked with digitalisation (Goldin and Katz, 1998;

Acemoglu, 2002; Acemoglu and Restrepo, 2017). The two components are not easy to disentangle,

especially as their effects on inequality may depend, among other things, on a country’s level of

development (International Monetary Fund, 2007).

Independent of the relative weights attributed to globalisation and technological change in changing

the distribution of income, the literature is in broad agreement on who the losers are: the lower middle

classes, i.e. relatively uneducated, low-skill workers in manufacturing (Autor et al., 2014). Not only does this

group bear the brunt of adjustment to technological change domestically; it is also a loser on the world stage,

being the only group whose aggregate income decreased in the 1988-2008 period, while millions were lifted

out of poverty in emerging economies, and top earners improved their relative and absolute conditions

everywhere (Milanovic, 2016). Economic hardship triggers social marginalisation: according to Autor et al.

(2017), reduced employment opportunities in trade-impacted industries lower the marriage-market value of

unskilled young men, leading to falling marriage rates and an increase in the number of children living below

the poverty line in single-mother households.

The political implications of these dynamics have been analysed in various contexts. With respect to

U.S. presidential elections, Margalit (2011) shows that trade-related layoffs at the local level predict a

tendency to punish the incumbent; Jensen et al. (2016) find that increasing imports correlate with decreasing

incumbent vote shares, as does a high concentration of employment in low-skill manufacturing. Where U.S.

congressional elections are concerned, Autor et al. (2016) argue that voter polarization has emerged in trade-

exposed districts since the early 2000s, with centrist candidates losing to markedly conservative Republicans

6

in predominantly white constituencies, and markedly liberal Democrats in predominantly non-white

constituencies.

With regard to Europe, Colantone and Stanig (2016, 2017), using district-level evidence on voting

and individual-level data on political preferences, show that the displacement of manufacturing workers

induced by import competition from China played a role both in the outcome of the Brexit referendum and in

the rise of far-right, nationalistic parties in continental Western Europe. The Brexit vote is also explained by

Becker et al. (2016) based on the characteristics of voters, such as education and income, and the features of

local labour markets, such as the manufacturing share and immigration from Eastern Europe. Becker and

Feltzer (2016) show that immigration is also related to anti-EU sentiment as expressed through votes for the

UK Independence Party (UKIP), and argue that anti-EU attitudes correlate with broader anti-integration

ones.

Burgoon (2013) links rising inequality to an increased frequency of anti-globalisation, anti-trade and

anti-European Union positions in party manifestos; he cites the frustration-aggression hypothesis, a long-

standing theory in psychology according to which “economic hardships can spark a displacement of

aggression, where the scape-goating turns to outsiders and, more generally, to forces outside the control of

one’s own decision-making and volition (Dollard et al., 1939)”. Guiso et al. (2017) explain the rise of

populism in Europe, defined as a preference for short-term protection policies, by looking at the interplay of

demand and supply dynamics. Increases in the demand for populism are driven by economic insecurity and

reduced trust in traditional parties in some segments of society, while increases in its supply depend on the

emergence of new parties that aim at channelling the grievances of these segments, and the repositioning of

traditional parties that aim at catching part of the disgruntled vote (Figure 4).

Figure 4

Transmission mechanism of economic shocks to demand/supply of populism, as presented by Guiso et al. (2017)

Economic insecurity

Increase the vote for

populist and extremist

parties

Lower trust in traditional

political parties and institutions

Shift to extreme

positions of incumbent

parties

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Supply: new

populist parties appear

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The political science literature helps shed some light on the nature of populism, and the circumstances that

favour its success. Canovan (1999) posits that populism is a method, rather than a specific ideology: “[it] is

best seen as an appeal to ‘the people’ against both the established structure of power and the dominant ideas

and values of the society. This structural feature in turn dictates populism’s […] political style and mood”.

Anti-establishment candidates in Sweden and Norway typically advocate low taxation and radical free-

market policies, in opposition to the principles of the Scandinavian welfare state, while their counterparts in

countries where economic liberalism is the norm gravitate towards protectionism and nationalism. Golder

(2016), after presenting the core characteristics of far-right parties in Europe, stresses the importance of

supply-side dynamics in explaining their recent gains, such as the choice of a “winning ideology” that is

confrontational but stops short of explicit anti-democratic contents. Inglehart and Norris (2016) suggest that

a key component on the demand side is the “cultural backlash” against rapidly changing values, somewhat

overlooked compared to the impact of economic factors. For a comprehensive review of political studies on

the matter, see Mudde and Rovira Kaltwasser (2017).

3. Data and descriptive evidence

3.1 Data Our analysis is based on three types of data:

(a) household-level information from the European Social Survey (ESS). The survey, funded by the

European Commission, the European Science Foundation and several national partners, ‘has been

mapping long-term attitudinal and behavioural changes in Europe’s social, political and moral

climate’ since 2002. It is directed by an international Central Co-ordinating Team, and carried out

every two years by independent national teams; a single questionnaire is written in English, then

translated into several languages. Contrary to other surveys with similar purposes, the ESS has a

probabilistic sampling design. At the time of writing this paper, data for seven rounds were

available, covering up to 2014. The number of countries covered varies depending on the round; a

total of thirty-two countries have participated at least once, of which sixteen have a complete series.

The questionnaire has a core module covering twelve broad topics, ranging from demographics and

financial circumstances to opinions on political and ethical issues; while some variation exists across

countries and over time, the questionnaire has been mostly stable throughout the history of the

survey. Several rotating modules, which change from round to round based on contingent

informational needs, complement the core module.

Our key variable is the answer to the question

“Now thinking about the European Union, some say European unification should go further. Others say it has already gone too far. Using this card, what number on the scale best describes your position?”

8

The scale is between 0 and 10, with 0 labeled as “Unification has already gone too far” and 10

labeled as “Unification should go further”.

(b) Party-level information from the Chapel Hill Expert Survey (CHES) and Manifesto Project Database

(MPD). CHES provides an assessment of political party positions along different dimensions,

several of which related to European integration. The survey has been conducted in 1999, 2002,

2006, 2010 and 2014. For the 2014 survey, 337 experts evaluated 268 parties in all EU countries.

MPD analyses parties’ election manifestos with the aim of highlighting their policy preferences. It

covers over 1000 parties from 1945 to 2016 in over 50 countries. The database is updated twice a

year.

(c) Public voting records of the European Parliament for the 2014-2017. Among all the EU votes, we

selected only those related to international trade issues, for a total of 34 votes, including for instance

those related to EU-Canada Comprehensive Economic and Trade Agreement (CETA), EU-US

Transatlantic Trade and Investment Partnership (TTIP), negotiations on Trade in Services

Agreement (TiSA) and on granting China the market economy status (see Appendix Table A1 for

further details).

3.2 Descriptive Evidence

Data from the ESS show that between 2004 and 2014 support for European integration decreased in

most countries (Figure 5). The fall was sharper than average in Eastern Europe, with the exception of

Estonia; countries such as Poland and Hungary were probably at the peak of enthusiasm exactly in 2004, the

year of their EU accession, but then became wary of further integration. Pro-integration sentiment also took a

hit in countries that were already at the low end of europhilia, such as Austria and the UK. The only country

where it improved in a statistically significant way is Germany.6

6 The increase in Portugal, despite being similar to Germany in magnitude, is not statistically different from zero. 9

Figure 5 Support for further European integration, ESS data, 2004 and 2014a

(RHS: average of self-reported scores on a 0-10 scale; LHS: variation in average scores)

a) Italy is not included in the ESS survey in 2014.

To understand how this correlates with other political dimensions, we look at which national party

each ESS respondent indicates as the one he/she feels closest to at the time of the interview. 7 We match this

information with the CHES/MPD taxonomies, wherein each party is attributed a numerical score ranging

from “Completely in favour” to “Completely against” on a variety of issues including international trade,

migration and the EU. The overall ideological stance of each party is also placed on a scale, ranging from 0

(extreme left) to 10 (extreme right). In contrast with the sentiment indicator shown above, which refers only

to the demand for EU integration, any descriptive statistic based on the matched data – where by assumption

those favouring a specific party are also attributed all its stances– also incorporates a supply-side component,

as it is mediated by the platforms adopted by political parties.

The first evidence from matched data is that, in parallel with greater disaffection towards the EU,

political polarization also increased. The share of respondents who reported feeling close to a radical party,8

either on the left or the right, rose from 7 per cent in 2004 to around 17 per cent in 2014 (Figure 6, panel A).

While the data, at first glance, appear to show a sharper increase in extreme left preferences, a closer look

reveals a picture that is more complex. Panel B of Figure 6 gives an idea of how ESS respondents were

distributed on a left-right scale in 2004 and 2014, according to the party they feel closest to. In 2004, the

distribution’s mode is on the moderate left, with the moderate right close behind; the two tails are relatively

thin. In 2014, the density around moderate positions decreases; the right portion of the distribution shifts

7 We believe this variable to be more informative compared to the indication of which party the respondent voted for in the last national election, as preferences might have evolved between the last national election and the time of the interview; also, elections are held in different years across countries, yielding gaps of different lengths. Using the vote variable does not change our results significantly. 8 We define as “radical left” those parties with a left/right score in the CHES between 0 and 2 (0: extreme left). Vice versa, “radical right” parties have a score between 8 and 10 (10: extreme right).

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even more to the right; both tails fatten, but the left one more so. In other words, the gains on the right have

two sources: i) the shifts in the mainstream and ii) parties with extreme platforms becoming more attractive.

On the other hand, it is possible that on the left those who started feeling uncomfortable with the mainstream

moved to the extremes.

Figure 6

Political polarization in Europe, ESS and CHES data, 2004 and 20141 Panel A: Share of respondents Panel B: Density estimation

(1) Left/right party placement is defined by the CHES. The relative density is obtained according to preferences expressed by ESS respondents regarding the party they feel closest to.

When performing the same exercise on respondent’s opinion on the EU, as mediated by the positions

of their preferred parties on the same issue, we confirm the message from the sentiment data: on a scale

where lower values indicate anti-EU position, the right tail fattens and the density on pro-EU stances

decreases9 (Figure 7, panel A). Where immigration is concerned, in 2004 the mode was around the middle of

a scale where higher values indicate anti-immigrant positions, with most parties mildly favourable; in 2014,

moderation was still more popular than either extreme, but both had gained consensus10 (Figure 7, panel B).

9 This variable is less informative compared to the direct indicator of sentiment from the ESS, as it incorporates the fact that most mainstream parties are traditionally pro-EU and, even when shifting to the right, they refrain from open criticism of the European project in their programs. 10 ESS data on individual sentiment on immigrants shows an unexpected dynamic over the observation period, with average openness to immigration at the country level improving slightly, except in Eastern Europe. As the correlation structure between anti-EU and anti-immigration positions remains stable over time (see also below), we believe that this result may be caused by social desirability bias: respondents might be afraid of being labeled as racist if they declare a dislike for immigrants, while no such stigma is attached to wariness of the EU.

0%

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2002 2004 2006 2008 2010 2012 2014

Being close to a rad-right partyBeing close to a rad-left party

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Figure 7 Opinions on the EU and immigration, ESS and CHES data, 2004 and 2014

(density estimation)

Unfortunately, the party stances on international trade are not included in the CHES dataset; we

instead construct a measure of opposition to trade based on two MPD scores, one summarizing the approval

for protectionist policies, another the approval for liberalisation policies. The picture that emerges is not clear

(Figure 8), as the MPD scores parties based on statements included in their manifesto; no mention of the

issue results in a zero, and that is the case for a majority of parties in our observed period.

Figure 8 Opinions on international trade, ESS and MPD data, 2004 and 2014

(density estimation)

To solve this problem, we look at actual votes on international trade cast by members of the

European parliament (MEPs) elected in 2014. In this way we can also retrieve a direct assessment of parties’

12

stance regarding protectionism/freeness of trade based on their actual behaviour in the legislative process,

while the other measures available, e.g. the MPD scores, usually rely on indirect assessments.

MEPs are elected at the same time in all countries, but each country has its own parties and

candidates; then national parties decide whether to enter an EU parliamentary group, a formal aggregation of

parties that are ideologically similar, or whether to remain outside all groups. MEPs are not obliged to vote

according to their group’s majority, and they can change groups during their mandate.

Panel A of Figure 9 shows the share of total anti-trade votes11 cast between 2014 and early 2017 by

parliamentary group, with colours from deep red to deep blue indicating a left-right continuum. About 50 per

cent of anti-trade votes between 2014 and 2017 came from two groups, which only represent a minority (just

above 10%) of the parliament: the European United Left/Nordic Green Left, and the Europe of Nations and

Freedom, which includes several nationalistic parties. The B panel shows that, indeed, the nationalists voted

against trade 80 per cent of the times, the hard left 70 per cent of the times, and a few far-right parties not

participating in any group more than 60 per cent of the time. On the other hand, the moderate-right European

Popular Party, also constituting the current parliamentary majority, almost never voted against trade; the

Socialist and Democrats group, the mainstream left, did so in less than 10 per cent of cases.

Figure 9

Votes on international trade in the European Parliament, by parliamentary group, 2014-20171

Panel A: Group share of total votes cast against trade

Panel B: Group share of anti-trade votes over all votes on trade

(1) GUE-NGL (Confederal Group of the European United Left - Nordic Green Left), Greens/EFA (Group of the Greens/European Free Alliance), S&D (Group of the Progressive Alliance of Socialists and Democrats in the European Parliament), ALDE (Group of the Alliance of Liberals and Democrats for Europe), EPP (Group of the European People's Party - Christian Democrats), ECR (European Conservatives and Reformists Group), EFDD (Europe of Freedom and Direct Democracy Group), ENF (Europe of Nations and Freedom Group), NA-R (Non-attached extreme right-wing members).

We construct an anti-trade score for each national party, measured as the average share of anti-

liberalization votes cast by MEPs affiliated with it over all votes on trade. Figure 10, panel A, shows that

parties on the extreme left and on the extreme right, as identified with the CHES metrics, are very similar

11 The total of anti-trade votes is defined as the sum of MEPs votes against trade liberalization across 34 selected votes in the EU parliament related to international trade issues.

GUE-NGLGreens/EFAS&DALDEEPPECREFDDENFNA-R

0102030405060708090

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with respect to voting records on international trade. Again, using the MPD scores on protectionism provides

a less clear result. As reported in Figure 10, panel B, the U-shape correlation between political left/right

orientation and anti-trade stance observed in Figure 10 is very weak if we only use the MPD information. As

we will see in Section 5, the anti-trade score based on EU Parliament votes will be key to properly determine

the individual characteristics that drive a preference for anti-trade parties.

Figure 10

Political parties: CHES national political orientation versus Protectionism score, 2014 Panel A: Score based on votes on international

trade in the European Parliament1 Panel B: MPD score on protectionism2

(1) Share of anti-trade votes on total votes on trade, by national parties as represented by MEPs.

(2) Approval for protectionist policies in parties’ manifesto (source: MPD).

Figure 11

Political parties: CHES national political orientation, Protectionism score, anti-EU and anti-immigration 2014

Panel A: Protectionism and anti-EU Panel B: Protectionism and anti-immigration

(1) Share of anti-trade votes on total votes on trade, by national parties as represented by MEPs. Anti-EU score based on CHES.

(2) Approval for protectionist policies in parties’ manifesto (source: MPD). Anti-immigration score based on CHES.

14

If we look at how overall political orientation correlates with the anti-EU stance, a well-defined U-

shaped correlation is still evident (Figure 11, panel A).12 However, Figure 11, panel B, shows that, in the

case of anti-immigration, contrary to the anti-trade and anti-EU dimensions, there is no symmetry between

the left and the right: parties divide along traditional lines, with the left in favour of permissive immigration

policies, and the right for strong restrictions.

4. The determinants of anti economic integration sentiment and voting

As a starting point, we assess the correlates of euroscepticism as they emerge from ESS data, pooled

over the 2004-2014 period (Table 1). Throughout this Section, we use a recoded version of the variable

shown in Figure 5, so as to have a direct measure of euroscepticism instead of an inverse one (higher values

now reflect a worse sentiment towards EU). All the regressions are weighted using sampling weights and the

standard errors are clustered at the regional level. We look at the coefficients obtained by regressing

euroscepticism scores13 on year dummies only, after controlling for country dummies: they are, as expected,

all positive and significant, and the opposition to the EU seems to have increased steadily over time since

2008 (column 1).14 Then we add an array of individual demographic, economic and social characteristics

(columns 2-4).

Most of them predict cross-sectional variation in euroscepticism, and the fit of the regression, while

still modest, improves. However, the magnitude of the coefficients on year dummies is basically unaffected,

signalling that – assuming a constant linear effect of each covariate on the dependent variable – changes in

those characteristics are not responsible for the time-series dynamics of the dependent variable.15 Finally, we

add economic cycle indicators both at the regional and national level16 (column 5): they matter, and they

reduce the magnitude and/or the significance of coefficients for 2012 and 2014, suggesting that the rise in

euroscepticism is triggered by the worsening of economic conditions at the macro level.

We find that individual traits associated with euroscepticism differ little from those generally

associated with globalisation losers (Autor et al, 2014; Antràs et al., 2017) or with people more sensitive to

the populist rhetoric (Durante et al., 2015; Guiso et al., 2017). Opposition to the EU is strongest among low-

skill workers, the less educated, those who feel that their income is not sufficient to meet their family’s

12 Appendix Figures A1 and A2 show that for left-wing parties the correlation is consistent across a spectrum, from slightly to strongly anti-trade and anti-EU, whereas for right-wing parties opposition to trade is not a feature of mildly anti-EU parties, while it connotates the strongly eurosceptic. 13 In all regressions presented in this paper, for the sake of simplicity we treat euroscepticism as a continuous variable. Results from ordered logit regressions, which take into account the fact that the variable is measured through a discrete scale, are very similar. 14 After the accession of 10 new Member States in 2004 and in the eve of the further enlargement towards Romania and Bulgaria on January 2007, in 2006 sentiment on the EU worsened. Since our dependent variable measures directly the individuals attitude towards the possibility of further EU integration, in 2006 it also may have captured fears of Turkey acceding (Eurobarometer 2006). 15 An alternative explanation could be that the individual characteristics that we consider are a rough measure of the individual economic conditions, and do not properly capture longitudinal variations. 16 The macro-economic conditions are proxied by the cumulative real growth rate of national private consumption and regional disposable income in the 3 years leading up to the moment in which the survey is conducted. We rely on data provided by EUROSTAT and the regional breakdown is at NAICS 2 level for most of the countries. 15

needs,17 and those who spend extensive amounts of time watching entertainment TV. Older cohorts are also

more eurosceptic, once the presence of a fixed income from pensions is controlled for. Conversely, those

who self-represent as leftists on an 11-point left-right scale, students, and high-skill workers are more likely

to be europhiles. It is worth noting that, among low-skill workers,18 those employed in the manufacturing

sector exhibit a more negative attitude towards the EU integration compared to individuals with similar skill

characteristics engaged in non-manufacturing activities, which are the reference group of the regressions.

This is consistent with the idea that low-skill workers in manufacturing have suffered the most from the

negative effects of external shocks (in particular from trade liberalisation), which might have contributed to

deplete their goodwill toward economic integration with other European countries. Finally, being

unemployed per se increases the anti-EU sentiment (column 3); however, once the individual economic

conditions are explicitly controlled for, this effect becomes negative, suggesting that unemployment affects

the attitude towards EU mainly through a reduction in personal income.

In order to better understand why individual characteristics do not seem to explain the variation in

average opposition to the EU over time, we relax the assumption of constant effect of covariates on the

dependent variable. We perform separate regressions for the initial and the final year of the ESS sample

(2004 and 2014) and we use the Blinder-Oaxaca decomposition in order to separate the endowment effect -

i.e. the change in the dependent variable explained by the changes in the average levels of covariates - from

the effect of changes in coefficients (Table 2). The results show that overall the endowment effects are

negligible, even if there are some (small) positive and negative contributions offsetting each other. In

particular, the worsening of macro-economic conditions favours the anti-EU sentiment; also population

aging adds a small contribution in the same direction. The improvement in the average education and skill

levels between 2004 and 2014 partly counterbalances.

The variation of coefficients accounts for most of the aggregate reduction of the EU-integration

score. We observe an increase in the responsiveness of the dependent variable to a variation in the income

feeling and to the exposure to entertainment TV, while the education level appears less relevant in reducing

the anti-EU attitude. We interpret this result, together with those shown in Table 1, to mean that a worsening

in individual economic conditions drives certain social groups, prone to be more eurosceptic than average

from the beginning, towards opposition that is more intense and more vocal.

17 The variable income feeling used in the regression analyses refers to the self-assessed personal economic condition and takes four possible values, ranging from “very difficult living on present income” to “living comfortably on present income”. 18 We define as low skill workers all the individuals engaged in an occupation in the classes 6, 7, 8 and 9 of the ISCO-08 classification, corresponding to the elementary and skilled-manual activities in the official ILO taxonomy. Then we distinguish between low skill workers employed in manufacturing activities and low skill workers employed in non-manufacturing ones. The latter category is used as reference group in the regressions. 16

Table 1

Correlates of euroscepticism (pooled data 2004-2014)

Standard errors are clustered at the regional levels. * p<0.1; ** p<0.05; *** p<0.01.

Dependent variable is an index of euroscepticism, ranging from 0 to 10.

(1) (2) (3) (4) (5)Left -0.161*** -0.157*** -0.173*** -0.172*** (0.0487) (0.0485) (0.0463) (0.0463)

Tot time TV 0.0499*** 0.0498*** 0.0375*** 0.0369*** (0.00628) (0.00617) (0.00560) (0.00549)

Time TV news -0.0834*** -0.0826*** -0.0750*** -0.0743*** (0.00817) (0.00813) (0.00809) (0.00814)

Years of education -0.0627*** -0.0681*** -0.0431*** -0.0438*** (0.00316) (0.00340) (0.00287) (0.00283)

Age 0.00926*** 0.00673*** 0.00762*** 0.00749*** (0.000836) (0.00101) (0.000961) (0.000954)

Female 0.114*** 0.129*** 0.158*** 0.158*** (0.0198) (0.0218) (0.0208) (0.0208)

Unemployed 0.0889** -0.0957*** -0.0991*** (0.0394) (0.0364) (0.0366)

Retired -0.135*** -0.133*** -0.129*** (0.0322) (0.0326) (0.0325)

Under education -0.525*** -0.474*** -0.472*** (0.0436) (0.0457) (0.0462)

Housework -0.0527* -0.0598** -0.0591** (0.0291) (0.0289) (0.0282)

Income feeling -0.242*** -0.238*** (0.0203) (0.0201)

Low skill manuf. 0.115*** 0.117*** (0.0369) (0.0371)

Medium skill manuf. -0.0876*** -0.0858*** (0.0310) (0.0309)

High skill -0.272*** -0.270*** (0.0360) (0.0361)

Occupation not report. -0.136*** -0.140*** (0.0393) (0.0399)

Regional economic cycle -0.370* (0.200)

Country economic cycle -1.657*** (0.352)

2006 0.217*** 0.240*** 0.238*** 0.234*** 0.229*** (0.0512) (0.0505) (0.0500) (0.0498) (0.0490)

2008 0.114* 0.143** 0.141** 0.129** 0.161*** (0.0602) (0.0607) (0.0595) (0.0556) (0.0599)

2012 0.294*** 0.321*** 0.322*** 0.298*** 0.106 (0.0821) (0.0800) (0.0783) (0.0741) (0.0714)

2014 0.409*** 0.444*** 0.446*** 0.436*** 0.282*** (0.0704) (0.0680) (0.0665) (0.0636) (0.0611)

Observations 128338 128338 128338 128338 128338Country fixed effects Y Y Y Y YR-squared 0.043 0.063 0.067 0.075 0.076

Anti-EU sentiment

17

Table 2

Change of euroscepticism over time (2004 and 2014)

Standard errors are clustered at the regional levels. * p<0.1; ** p<0.05; *** p<0.01

2004 2014Change in

coefficientsEffect of change in endowments

Left -0.182*** -0.232*** -0.0505 -0.00332* (0.0627) (0.0731) (0.0714) (0.00175)

Tot time TV 0.00936 0.0801*** 0.0707*** -0.000740 (0.0126) (0.0123) (0.0184) (0.00106)

Time TV news -0.0608*** -0.0938*** -0.0330 -0.00159 (0.0165) (0.0179) (0.0246) (0.00168)

Years of education -0.0552*** -0.0297*** 0.0255*** -0.0564*** (0.00724) (0.00791) (0.00917) (0.00863)

Age 0.00932*** 0.00704*** -0.00229 0.0261*** (0.00188) (0.00199) (0.00302) (0.00564)

Female 0.244*** 0.0775** -0.166*** 0.000988 (0.0365) (0.0359) (0.0536) (0.00116)

Unemployed 0.0222 -0.124* -0.146 0.0000739 (0.0924) (0.0627) (0.108) (0.000324)

Retired -0.144** -0.0987* 0.0454 -0.00409** (0.0671) (0.0592) (0.0906) (0.00200)

Under education -0.389*** -0.509*** -0.120 0.00711*** (0.0709) (0.0911) (0.118) (0.00244)

Housework -0.000927 -0.139*** -0.139* 0.0000402 (0.0579) (0.0528) (0.0765) (0.00251)

Income feeling -0.118*** -0.249*** -0.131*** -0.00376 (0.0293) (0.0394) (0.0456) (0.00354)

Low skill manuf. 0.0335 0.0413 0.00781 -0.000280 (0.0584) (0.0611) (0.0772) (0.000523)

Medium skill manuf. -0.166** -0.124** 0.0427 -0.000720 (0.0654) (0.0587) (0.0922) (0.00119)

High skill -0.337*** -0.373*** -0.0366 -0.0209*** (0.0738) (0.0645) (0.0919) (0.00522)

Occupation not report. -0.173** -0.284*** -0.111 0.00704** (0.0776) (0.0934) (0.139) (0.00337)

Regional economic cycle -0.607* -0.503 0.104 0.0485* (0.332) (0.418) (0.461) (0.0276)

Constant 0.0960 -0.0518 -0.148 (0.150) (0.195) (0.222)

Observations 28437 28556 56993 56993R-squared 0.032 0.038Specification OLS OLS Oaxaca-Blinder Oaxaca-Blinder

0.409*** -0.00195(0.0492) (0.0308)

Anti-EU sentiment

Total difference0.418***(0.0630)

18

To further investigate this hypothesis we analyse the evolution of the EU sentiment for different

clusters of individuals that our previous results suggest being at polar opposites in their attitude towards the

EU and their exposure to globalisation/technological change. We single out two groups: the clustering is

performed according to education level, time spent watching entertainment TV and news, and occupational

skill. Each group represents around 10% of the entire population. The first group, labelled “highly exposed

to economic shock”, comprises low-skill workers with a low level of education and watching more

entertainment TV. The second group is made of managers and professionals with a higher educational

attainment that spend more time watching news, and it is labelled “mildly exposed to economic shock”.

Already in 2004 these two groups of individuals display a very different attitude towards the EU,

since the average of the self-reported score measuring the support for further European integration is around

10% higher for the “mildly exposed” than the “highly exposed” (Fig. 13, panel A). Although widespread,

the decline in the sentiment is much steeper for the “highly exposed”. By 2014 the difference between the

average score of the two groups doubles to 20%.

Fig. 13

Level and changes in the EU sentiment by different exposure to economic shocks

(A panel: evolution of EU sentiment by different groups; B panel: changes in the EU sentiment for narrower group of people)

Source: own elaboration based on ESS survey data.

Results in Table 1 show that a poor self-assessed personal economic condition is a key driver of the

anti-EU sentiment. Therefore we further divide the two groups into four sub-groups: for each group, we

separate those who live comfortably on their present income from those that find very difficult to live with

their current earnings. The highest drop in the EU sentiment from 2004 to 2014 is recorded among highly

exposed persons who feel that their income is not sufficient to meet their family’s needs (Fig. 13, panel B).

4.04.24.44.64.85.05.25.45.65.86.0

2004 2006 2008 2010 2012 2014

Highly exposed Mildly exposed Population mean4.04.24.44.64.85.05.25.45.65.86.0

-1-0.9-0.8-0.7-0.6-0.5-0.4-0.3-0.2-0.1

0

Highly exposed notcoping with present

income

Higly exposed butcoping with present

income

Mildly exposed notcoping with present

income

Mildly exposed butcoping with present

income

2014-2004 (LHS) 2014 (RHS)

2014-2004 pop. mean

2014 pop. mean

19

Highly exposed individuals who report living comfortably show a much lower reduction, in line with

the one observed for the share of the mildly exposed group that have economic difficulties. The different

exposure to external economic shocks seems to be key to predict the average level of the sentiment of the

two groups, as the pro-EU score for the latter group is still much higher than the one of the former, 5.0 and

4.4 in 2014 respectively. Unsurprisingly, the highest average level of the score – 5.5 in 2014 – and the lowest

drop – just 0.2 points in 10 years – is recorded for the group of mildly exposed individuals that declare

having no economic difficulties.

In the previous analyses we have quantified the effect of economic insecurity directly on the EU

sentiment (Table 1 and 2). However, poor macro and individual-economic conditions not only affect the

attitude towards the EU, but also lower the general trust in traditional politics (Guiso et al, 2017). In turn, this

general distrust triggers per se a deterioration of the sentiment towards the European institutions, since,

according to the populist message, they embody the supranational elites. A similar mechanism could link the

anti-immigration sentiment with the attitude towards the European Union.19 Therefore, in principle,

economic conditions might have played a minor role in explaining the disaffection towards Brussels and the

observed drop in the EU sentiment since 2004 might have been entirely driven by an increase in political

distrust and by the escalating anti-immigration sentiment.

To shed some light on this point, we try to measure explicitly the direct effect of economic

conditions on attitude towards the EU (Table 3). Column (1) reports the anti-EU sentiment estimates taken

from Table 1. First, we analyse the determinants of the trust in politicians and in a supranational institution,

the United Nations (UN), and of the feeling towards migrants20 (columns 2-4, each variable enters as the

dependent variable). With few exceptions21 the same individual socio-economic characteristics that increase

(decrease) the anti-EU sentiment also reduce (increase) the trust in politicians and in the UN and worsen

(improve) the sentiment towards immigration. To disentangle the direct effect of these socio-economic

characteristics on the EU attitude we control for the trust and for the feeling towards migrants (columns 5-6).

As expected, trust in politicians and in the UN, as well as a better feeling towards migrants, is negatively

associated with the anti-EU positions. When these variables are included in the regression, the effects of the

economic conditions are still significant, but they are less intense than the ones obtained not controlling for

these other determinants (column 1).

19 Increasing migrant flows (both from within and from outside the EU), and the fear of associated downward pressure on average wages, may determine a deterioration of the feeling towards migrants. Since the immigration policy of European member states is influenced by EU policies, the worsening of economic condition induced by migratory pressure might have contributed to the increase of opposition against the EU (Becker and Fetzer, 2016). 20 The related question in the ESS is the following: “Is your country made a worse or a better place to live by people coming to live here from other countries?”. 21 People who declare a left-wing political preference are more prone to have a better feeling towards migration and to have a better attitude towards the EU. However, their distrust in politicians and in the UN is not statistically different from people not being left-wing. Other variables that predict quite well the anti-EU sentiment, the distrust in politicians and the anti-immigration attitude, as the time spent watching TV and being a low skill manufacturing worker, are not associated with the distrust in the UN. 20

Table 3

Direct and indirect effects of economic conditions on euroscepticism (pooled data 2004-2014)

Standard errors are clustered at the regional levels. * p<0.1; ** p<0.05; *** p<0.01

A relevant share of the effect of economic conditions on the anti-EU sentiment is associated with an

increased distrust of politicians and anti-immigration sentiment. Nevertheless, the direct channel is still

(1) (2) (3) (4) (5) (6)Left -0.172*** -0.0394 0.0162 0.460*** -0.176*** -0.0433 (0.0463) (0.0298) (0.0291) (0.0383) (0.0424) (0.0378)

Tot time TV 0.0369*** -0.0359*** -0.00500 -0.0707*** 0.0307*** 0.0123*** (0.00549) (0.00683) (0.00694) (0.00836) (0.00509) (0.00468)

Time TV news -0.0743*** 0.110*** 0.0767*** 0.107*** -0.0453*** -0.0219*** (0.00814) (0.00874) (0.0112) (0.0112) (0.00750) (0.00733)

Years of education -0.0438*** 0.0138*** 0.0303*** 0.0661*** -0.0368*** -0.0195*** (0.00283) (0.00278) (0.00332) (0.00377) (0.00257) (0.00254)

Age 0.00749*** -0.000740 -0.00852*** -0.00528*** 0.00600*** 0.00476*** (0.000954) (0.00105) (0.00109) (0.00123) (0.000909) (0.000858)

Female 0.158*** 0.00711 -0.0522*** -0.0273 0.151*** 0.144*** (0.0208) (0.0199) (0.0192) (0.0271) (0.0209) (0.0225)

Unemployed -0.0991*** -0.104*** -0.151*** -0.0172 -0.139*** -0.135*** (0.0366) (0.0369) (0.0357) (0.0327) (0.0350) (0.0338)

Retired -0.129*** 0.135*** 0.119*** -0.113*** -0.0895*** -0.131*** (0.0325) (0.0270) (0.0325) (0.0239) (0.0297) (0.0298)

Under education -0.472*** 0.357*** 0.519*** 0.340*** -0.334*** -0.268*** (0.0462) (0.0404) (0.0391) (0.0336) (0.0458) (0.0417)

Housework -0.0591** 0.0162 0.0161 0.0332 -0.0540* -0.0458* (0.0282) (0.0243) (0.0261) (0.0230) (0.0276) (0.0272)

Income feeling -0.238*** 0.357*** 0.312*** 0.213*** -0.134*** -0.0983*** (0.0201) (0.0163) (0.0137) (0.0129) (0.0176) (0.0177)

Low skill manuf. 0.117*** -0.166*** 0.0197 -0.0753*** 0.0947*** 0.0804** (0.0371) (0.0270) (0.0294) (0.0287) (0.0350) (0.0325)

Medium skill manuf. -0.0858*** -0.0356 0.105*** 0.110*** -0.0742** -0.0440 (0.0309) (0.0263) (0.0292) (0.0269) (0.0298) (0.0277)

High skill -0.270*** 0.0957*** 0.288*** 0.358*** -0.209*** -0.120*** (0.0361) (0.0293) (0.0299) (0.0369) (0.0350) (0.0321)

Occupation not report. -0.140*** 0.233*** 0.199*** 0.177*** -0.0727* -0.0385 (0.0399) (0.0377) (0.0388) (0.0380) (0.0401) (0.0415)

Regional economic cycle -0.370* 0.699** 0.244 0.730*** -0.225 -0.0563 (0.200) (0.285) (0.165) (0.241) (0.208) (0.185)

Country economic cycle -1.657*** 0.322 0.461 -0.249 -1.534*** -1.632*** (0.352) (0.669) (0.403) (0.622) (0.290) (0.285)

Trust in politicians -0.151*** -0.105*** (0.00879) (0.00777)

Trust in the United Nations -0.162*** -0.135*** (0.00771) (0.00836)

-0.284***(0.0101)

2006 0.229*** 0.0753** 0.00441 0.0346 0.241*** 0.247*** (0.0490) (0.0373) (0.0397) (0.0368) (0.0440) (0.0409)

2008 0.161*** 0.0235 -0.0278 0.104** 0.160*** 0.189*** (0.0599) (0.0515) (0.0372) (0.0485) (0.0562) (0.0504)

2012 0.106 0.0221 -0.00618 0.287*** 0.109* 0.189*** (0.0714) (0.0741) (0.0572) (0.0499) (0.0633) (0.0598)

2014 0.282*** -0.0153 -0.182*** 0.173*** 0.250*** 0.305*** (0.0611) (0.0707) (0.0681) (0.0450) (0.0554) (0.0509)

Observations 128338 128338 128338 128338 128338 128338Country fixed effects Y Y Y Y Y YR-squared 0.076 0.174 0.095 0.142 0.129 0.179

Anti-EU sentiment

Good feeling towards immigrants

Anti-EU sentiment

Trust in politicians

Trust in the United

Nations

Good feeling towards

immigrants

21

sizable: all else equal, going from being a high skill worker living comfortably on present income to a low

skill manufacturing worker that finds very difficult to live on present income reduces the average pro-EU

score by 0.6 points when controlling for the trust and migration variables (around 12% of the average score

in the population), while the reduction amounts to 1.3 points when these variables are not controlled for.

5. Broader anti-economic integration sentiment in political preferences

In this section we exploit the information about the political preferences expressed by the

respondents of the ESS, so that we can match the characteristics of individuals with the actual platforms of

the political party they feel close to (see section 3). In this way we can test whether the socio-economic

determinants of euroscepticism and anti-immigration sentiment also lead to political outcomes consistent

with these positions. Indeed, the relationship could be more complex than a one-to-one correspondence,

since the political choice results from the interplay of demand and supply factors (i.e. personal views and

positions expressed by the parties); moreover, each party offers a bundle of electoral proposals on different

issues that do not necessarily overlap in full with the individual position. Actual voting behaviour depends on

the relative relevance of the different issues for the individual and in the parties’ platforms, as well as on

other factors such as the deep beliefs of the voter.

We investigate different dimensions of international economic integration, including also aspects

that are not covered in the ESS surveys. In particular, we use the information on political preference of the

ESS respondents to explore also the position on international trade policies, as implied by the closeness to a

relatively anti- or pro-trade political party. First, we consider the probability of embracing a party with an

anti-EU stance according to the scores assigned in the CHES.22 The results reported in the first column of

Table 4 broadly confirm the findings of the analysis of EU sentiment. Spending more hours watching

entertainment TV, being older, poorly educated and/or engaged in low skill occupation (in particular in the

manufacturing sector), all these factors increase the probability of choosing an eurosceptic party, while the

time spent watching news and being engaged in a high skill occupation have an opposite effect. Contrary to

what we found for anti-EU sentiment (tables 1 and 3), macroeconomic conditions (i.e. the country and

regional aggregate growth rates) do not have a significant effect on political preferences, probably because

individual opinions are more responsive to macroeconomic fluctuations. Therefore focusing exclusively on

voting behaviour might understate the role of general economic conditions in influencing the underlying

population sentiment, since this is mediated by the parties’ positions in electoral ballots.

The estimates in column 1 might suffer from selection bias as individuals often choose not to declare

their political preference and this choice could be related to their opinion on politics and, eventually, on

economic integration policies. In particular, since the same determinants that trigger the anti-EU attitude are

22 We use both an absolute and a relative criterion in order to identify the anti-EU political parties. We first select all the parties that are below the 5% centile of the pooled distribution of the CHES variable that measures the position toward the European integration. In addition, we consider as anti-EU also the party that shows the lowest score of the variable in each country-year, given that its score is below 4, which corresponds to a “neutral” position in the Chapel Hill scale. 22

often associated with a distrust in politics (see section 4), it may be more likely that eurosceptic people do

not identify themselves in any political party at all. To account for this selection bias, following Guiso et al

(2017), we resort to an Heckman probit procedure. We explicitly model the probability of feeling close to

any party in terms of all the individual variables used in our estimate of the anti-EU sentiment (Table 1), as

well as regarding the involvement of the individual in some active political activity. Working for a political

party or action group signals a high level of engagement and nearness to some party, which is modelled in

the first stage, but should not predict affinity towards a particular party (modelled in the second stage).23 As

shown in Table 4 column 2, most of the covariates that predicts euroscepticism are also significantly

correlated with the probability of feeling close to a party (with the opposite sign). As expected, also being

engaged in political activity is strongly significant.

Once controlled for this selection mechanism (column 3), the magnitude of the effects generally

increases. In particular the coefficient estimated through the Heckman probit procedure show a stronger

political polarization between low skill/less educated and high skill/highly educated workers. This wedge

emerges also when we explore other dimensions of international economic integration, as the closeness to an

anti-immigration or an anti-trade party (Table 4, columns 4 and 5).24 The factors that drive the vote for anti-

EU parties are often the same that trigger the choice of protectionist platforms; in particular the individual

income level turns out to be negative and highly significant in both the regressions. In some cases the effects

of the covariates in the anti-trade regression are smaller or not statistical significant, with the notable

exception of the unemployment status, positive and highly significant. As expected, the most evident

difference between the anti-immigration and anti-trade determinants lies on the individual self-placement on

the political spectrum, with right-wing people tougher on immigration and left-wing more in favour of trade

protectionism. Finally, we find that the individual characteristics that are associated with choosing parties

that pursue inward looking policies are also the drivers of voting for “radical” platforms (Table 4, column 6).

It is worth noting that elder people are less prone to vote for political parties at the extremes of the political

spectrum. This might explain why the coefficient associated with the age of the ESS respondent is usually

negative (and significant) in Table 4 while it appears with an opposite sign in the analyses of personal

attitudes in Section 4.

23 The correlation between the variable “worked for a political party or action group in the last 12 months” with the probability of feeling closer to an anti-EU party is basically nil (just 0.0065). 24 We identify these parties following the same criterion used to single out the anti-EU parties (see footnote 22). 23

Table 4

Determinants of closeness to anti-EU, anti-immigration and anti-trade and radical parties (pooled data 2004-2014)

Standard errors are clustered at the regional levels. * p<0.1; ** p<0.05; *** p<0.01

First-stageregression:

Close to any party

Close to anti-EU party

Close to anti-immigration

party

Close to anti-trade party

Close to radical party

(1) (2) (3) (4) (5) (6) Worked in political party 0.896***

(0.0256)

Left 0.0972* 0.403*** 0.0581 -0.815*** 0.361*** 0.205*** (0.0509) (0.0251) (0.0534) (0.0766) (0.0834) (0.0607)

Tot time TV 0.0199*** -0.0236*** 0.0228*** 0.0235*** 0.00774 0.0209*** (0.00723) (0.00306) (0.00746) (0.00726) (0.00730) (0.00701)

Time TV news -0.0125* 0.102*** -0.0229** -0.00820 0.00659 -0.0255*** (0.00724) (0.00551) (0.0116) (0.0110) (0.0110) (0.00813)

Years of education -0.0133*** 0.0201*** -0.0150*** -0.0144*** -0.00594 0.00256 (0.00322) (0.00253) (0.00337) (0.00341) (0.00440) (0.00441)

Age -0.00690*** 0.0112*** -0.00789*** -0.00487*** -0.000857 -0.00661*** (0.00113) (0.000639) (0.00116) (0.00125) (0.00149) (0.000945)

Female -0.0922*** -0.141*** -0.0768** -0.153*** -0.0837*** -0.0765*** (0.0249) (0.0125) (0.0316) (0.0244) (0.0212) (0.0189)

Unemployed 0.00740 -0.0435*** 0.00644 -0.0490 0.0992** 0.0994*** (0.0403) (0.0167) (0.0398) (0.0363) (0.0409) (0.0374)

Retired 0.0459 0.0552*** 0.0408 -0.0114 0.0101 0.0345 (0.0348) (0.0174) (0.0347) (0.0303) (0.0292) (0.0315)

Under education -0.0383 0.121*** -0.0486 -0.116** -0.0252 0.0210 (0.0571) (0.0189) (0.0554) (0.0489) (0.0462) (0.0420)

Housework -0.0890** 0.0681*** -0.0935** -0.0260 -0.00622 -0.0263 (0.0363) (0.0144) (0.0370) (0.0251) (0.0295) (0.0242)

Income feeling -0.112*** 0.0898*** -0.120*** -0.0254 -0.0509** -0.129*** (0.0146) (0.00613) (0.0149) (0.0163) (0.0233) (0.0173)

Low skill manuf. 0.0640* -0.0391** 0.0714** 0.0595* 0.0561* 0.0921*** (0.0333) (0.0167) (0.0336) (0.0311) (0.0332) (0.0289)

Medium skill manuf. -0.0243 0.0318** -0.0252 0.00576 0.0304 0.0112 (0.0272) (0.0158) (0.0276) (0.0284) (0.0317) (0.0287)

High skill -0.172*** 0.139*** -0.183*** -0.106*** -0.0274 -0.120*** (0.0282) (0.0186) (0.0289) (0.0355) (0.0332) (0.0312)

Occupation not report. -0.144*** -0.141*** -0.127** -0.0167 -0.0546 -0.0528 (0.0504) (0.0188) (0.0509) (0.0367) (0.0435) (0.0423)

Regional economic cycle -0.400 0.182 -0.411 -0.456 0.180 -0.336 (0.420) (0.127) (0.418) (0.349) (0.341) (0.315)

Country economic cycle 1.257 -0.104 1.275 -7.100*** -0.192 0.518 (0.892) (0.417) (0.875) (1.682) (1.028) (0.925)

2006 -0.0752 -0.00198 -0.0757 -0.0487 -0.335** 0.103 (0.118) (0.0296) (0.117) (0.0989) (0.152) (0.0701)

2008 0.00903 0.00730 0.00861 0.185*** -0.531*** 0.153* (0.137) (0.0297) (0.136) (0.0572) (0.134) (0.0784)

2010 0.210* -0.0184 0.211* -0.169 -0.257* 0.229***(0.114) (0.0407) (0.112) (0.121) (0.148) (0.0856)

2012 0.148 -0.0663* 0.154 -0.487*** -0.157 0.238*** (0.103) (0.0354) (0.101) (0.146) (0.150) (0.0923)

2014 0.464*** 0.0164 0.460*** -0.301** 0.127 0.522*** (0.0789) (0.0287) (0.0792) (0.142) (0.137) (0.0995)

Observations 75482 165542 165542 152801 142907 170601Country fixed effects Y Y Y Y Y YPseudo R-squared 0.1156Specification Probit Selection eq.

Close to anti-EU party

Second-stageregressions:

Heckman Probit

24

Table 5

Determinants of closeness to anti-trade parties based on EU voting (pooled data 2012-2014)

Standard errors are clustered at the regional levels. * p<0.1; ** p<0.05; *** p<0.01

First-stageregression:

(1) (2) (3) (4) (5)Worked in political party 0.804***

(0.0439)

Left 0.437*** 0.404*** 0.405*** 0.250 0.171 (0.103) (0.0290) (0.123) (0.182) (0.182)

Tot time TV 0.0172** -0.0173*** 0.0192**(0.00866) (0.00637) (0.00881)

Tot time TV / No Left 0.0654*** 0.0618*** (0.0121) (0.0117)

Tot time TV / Left -0.0383** -0.0463*** (0.0164) (0.0167)

Time TV news -0.0152 0.101*** -0.0247(0.0112) (0.00750) (0.0157)

Time TV news / No Left -0.0863*** -0.0796*** (0.0196) (0.0202)

Time TV news / Left 0.0425** 0.0590*** (0.0197) (0.0220)

Years of education 0.00135 0.0157*** 0.000253(0.00451) (0.00283) (0.00494)

Years of education / No Left -0.0154** -0.0147** (0.00747) (0.00719)

Years of education / Left 0.0102* 0.0153** (0.00595) (0.00659)

Age -0.00822*** 0.0103*** -0.00892*** -0.00948*** -0.00973*** (0.00160) (0.000659) (0.00185) (0.00175) (0.00212)

Female -0.104*** -0.144*** -0.0898** -0.0880** -0.0802* (0.0357) (0.0158) (0.0396) (0.0388) (0.0416)

Unemployed 0.155*** -0.0208 0.145*** 0.152*** 0.162*** (0.0505) (0.0319) (0.0499) (0.0503) (0.0523)

Retired -0.0252 0.0732*** -0.0292 -0.0260 -0.0370 (0.0514) (0.0223) (0.0508) (0.0511) (0.0533)

Under education -0.114* 0.0946*** -0.118* -0.137** -0.0668 (0.0582) (0.0322) (0.0612) (0.0609) (0.0616)

Housework 0.0431 0.0798*** 0.0360 0.0242 0.0338 (0.0545) (0.0221) (0.0582) (0.0580) (0.0572)

Income feeling -0.114*** 0.0936*** -0.120*** -0.121*** -0.0752** (0.0321) (0.0116) (0.0331) (0.0324) (0.0319)

Low skill manuf. 0.137*** -0.000219 0.144*** 0.143*** 0.125*** (0.0483) (0.0333) (0.0470) (0.0456) (0.0477)

Medium skill manuf. 0.0256 0.0456 0.0267 0.0242 0.0328 (0.0479) (0.0284) (0.0482) (0.0477) (0.0503)

High skill -0.143*** 0.152*** -0.150** -0.159*** -0.134** (0.0547) (0.0325) (0.0590) (0.0586) (0.0601)

Occupation not report. -0.0571 -0.121*** -0.0429 -0.0402 -0.000544 (0.0708) (0.0357) (0.0705) (0.0701) (0.0765)

2014 0.211*** 0.0781*** 0.204*** 0.200*** 0.193*** (0.0414) (0.0276) (0.0442) (0.0445) (0.0450)

Trust in politicians -0.104*** (0.0140)

Trust in the United Nations -0.0415*** (0.00840)

Observations 23419 54558 54558 54558 50176Country fixed effects Y Y Y Y YPseudo R-squared 0.1426Specification Probit Selection eq. Heckman Probit

Close to anti-trade party based

on EU voting

Second-stageregressions:

Close to any party

Close to anti-trade party based on EU voting

25

As mentioned in section 3, the pro/anti trade score of each party is poorly measured in the Manifesto

Project Database (MPD). Therefore, we consider an alternative gauge on the stance of the national parties on

international trade issues based on the actual voting patterns of their affiliates elected to the EU Parliament

(see section 3). Since we have data of EU Parliament members’ votes only for the current legislature (started

in 2014), we matched national parties’ scores on trade issues with the individual data collected in the two

most recent waves of the ESS (2012 and 2014). The results in Table 5 are broadly in line with those in Table

4 based on MDP scores, but the estimates are generally more precise and larger in magnitude. In particular

the effects are much stronger for the individuals highly exposed to globalization/technological change. In the

baseline regressions (columns 1 and 3) we do not find any statistically significant effect of the education

level and the time spent watching news, unless we allow for a differentiated impact of these two factors

according to the self-reported political identity, we find very heterogeneous (and significant) effects. People

closer to right-wing positions exhibit the same patterns which emerged in the previous analyses, while the

relationships goes in the opposite direction in the case of left-leaning individuals. It suggests that, among the

latter group, highly educated people watching little TV entertainment compared to news are more likely to

vote for an anti-trade party. Again, as in Table 4, the individual income level turns out to be negative and

highly significant. As observed in the analysis of the anti-EU sentiment (Table 3), the opposition to

international trade appears to be stronger among individuals that place low confidence in politics and

international institutions (Table 5, column 5); moreover, the reduction of the coefficients associated with

income and skill level – that remain statistically significant – suggests that the pressure for protectionist

policies comes also from a more general deterioration of the political trust related with worsening economic

conditions.

6. Conclusions

In this paper we set out to answer two questions: what explains the rise in euroscepticism, i.e.

disaffection with the EU, observed in most member states in the recent past? How does euroscepticism relate

with the broader aversion to international economic integration (both in its trade and labour mobility

dimensions) that is now commonplace in some socio-demographic groups across advanced countries?

Based on a new dataset and a methodology that combines household-level data, manifestos of

political parties and voting records from the EU Parliament, we found that euroscepticism has always been

higher than average among the groups that are now known as “globalisation losers”: low-skill manufacturing

workers, the less educated, and those who feel that their income is not adequate. It also correlates with traits

such as distrust of politicians, aversion to immigrants, and the propensity to watch a lot of entertainment TV.

However, between 2004 and 2014, the gap in approval towards the EU between these segments of the

population and the rest widened, as economic conditions at the macro level worsened.

We find that the same traits that predict euroscepticism also predict the vote for “radical” and anti-

establishment parties, broadly defined as those that promise drastic changes in the status quo and claim to

26

represent the interests of the people against the elite. Both on the left and the right, anti-EU and anti-trade

positions figure prominently in party agendas, and are similar in their association with individual

characteristics of their constituencies; on the right, this also applies to anti-immigration stances.

Our results suggest that euroscepticism is, at least in part, a local manifestation of the broader

backlash against international economic integration that is sweeping through most advanced economies. This

stands to reason: for EU citizens, EU membership is the most immediate incarnation of openness, as it

implies free circulation of people, goods, services, and capital across national borders within the Union, and

common pro-integration policies with respect to the rest of the world. Also, on account of the technocratic

connotation that has been attached to the EU in large part of the media, the EU has been an easy target of

anti-establishment indignation.

Worsening economic conditions, both at the individual and at the macro level, turn out to be a

remarkable trigger of the rise of the anti-EU and, more in general, of the anti-globalization sentiment. In

particular this drives certain social groups, already prone to be eurosceptic, towards more intense opposition.

In the short run, strengthening the recovery of macroeconomic conditions is important to prevent a further

deterioration of the attitudes toward the EU and the international economic integration. In the long run, it

will be key to pursue policies that are able to mitigate the adjustment costs coming from globalization and

technological progress, that insofar have proved to be particularly harsh for the most vulnerable groups.

27

Appendix Table A1

List of EU parliament votes on international trade issues

Date Document voted Pro/Against

Trade Liberalization

15.03.2017 EU-Brazil Agreement: modification of concessions in the schedule of Croatia in the course of its accession - Draft legislative resolution : vote consent - consent

Pro

15.02.2017 EU-Canada Comprehensive Economic and Trade Agreement - Draft legislative resolution : vote: consent - consent

Pro

15.02.2017 Conclusion of the EU-Canada CETA-Motions for resolutions - Motion for resolution : vote: resolution

Against

15.02.2017 Conclusion of the EU-Canada CETA-Motions for resolutions - Motion for resolution : vote: resolution

Against

15.02.2017 Conclusion of the EU-Canada CETA-Motions for resolutions - Motion for resolution : vote: resolution

Against

15.02.2017 Conclusion of the EU-Canada CETA-Motions for resolutions - Motion for resolution : vote: resolution

Pro

15.02.2017 Agreement on Trade in Civil Aircraft (Product Coverage Annex) - Draft legislative resolution : vote: consent - consent

Pro

19.01.2017 EU-Kosovo Stabilisation and Association Agreement: procedures for its application - Draft legislative resolution : single vote

Pro

19.01.2017 Imports of textile products from certain third countries not covered by specific Union import rules - Draft legislative resolution : single vote - ordinary legislative procedure, first reading

Pro

14.12.2016 EC-Uzbekistan Partnership and Cooperation Agreement and bilateral trade in textiles - Draft legislative resolution : vote consent - consent

Pro

14.12.2016 EC-Uzbekistan Partnership and Cooperation Agreement and bilateral trade in textiles (resolution) - Motion for resolution : single vote

Pro

14.12.2016 EU-Colombia and Peru Trade Agreement (accession of Ecuador) - Draft legislative resolution : vote consent - consent

Pro

01.12.2016 EU-Ghana Stepping Stone Economic Partnership Agreement - Draft legislative resolution : vote consent

Pro

14.09.2016 Economic Partnership Agreement between the EU and the SADC EPA States - Draft legislative resolution : vote: consent - consent

Pro

13.09.2016 EU-China Agreement relating to the accession of Croatia - Draft legislative resolution : vote: consent - consent

Pro

05.07.2016 A forward-looking and innovative future strategy for trade and investment - Motion for resolution : vote: resolution

Pro

08.06.2016 Expansion of trade in Information Technology Products (ITA) - Draft legislative resolution : approbation - consent

Pro

07.06.2016 EU-Colombia and Peru Trade Agreement (accession of Croatia) - Draft legislative resolution : approbation - consent

Pro

07.06.2016 Uniform technical prescriptions for wheeled vehicles: UNECE agreement - Draft legislative resolution : approbation - consent

Pro

28

12.05.2016 China's market economy status (Motion by EFDD) - Motion for resolution : vote: resolution

Against

12.05.2016 China's market economy status (Motion by ENF) - Motion for resolution : vote: resolution

Against

10.03.2016 Introduction of emergency autonomous trade measures for Tunisia - Draft legislative resolution : vote: legislative resolution - ordinary legislative procedure, first reading

Pro

25.02.2016 Opening of FTA negotiations with Australia and New Zealand - Motion for resolution : vote: resolution

Pro

25.02.2016 Opening of negotiations for an EU-Tunisia Free Trade Agreement - Motion for resolution : vote: resolution

Pro

03.02.2016 Negotiations for the Trade in Services Agreement (TiSA) - Motion for resolution : vote: resolution

Pro

20.01.2016 Objection to delegated act on a scheme of generalised tariff preferences - Motion for resolution : vote: resolution

Against

26.11.2015 The state of play of the Doha Development Agenda in view of the 10th WTO Ministerial Conference - Motion for resolution : vote: resolution

Pro

09.09.2015 Protocol amending the Marrakesh agreement establishing the World Trade Organization - Draft legislative resolution : approbation - consent

Pro

08.07.2015 Negotiations for the Transatlantic Trade and Investment Partnership (TTIP) - Motion for resolution : vote: resolution

Pro

17.12.2014 Autonomous trade preferences for the Republic of Moldova - Draft legislative resolution : single vote - consent

Pro

17.12.2014 Tariff treatment for goods originating from Ecuador - Draft legislative resolution : single vote - consent

Pro

23.10.2014 Customs duties on goods originating in Ukraine - Draft legislative resolution : vote: legislative resolution - consent

Pro

22.10.2014 Protocol to the EU-Republic of Korea Free Trade Agreement to take account of Croatia's accession to the EU - Draft legislative resolution : approbation - consent

Pro

18.09.2014 Commission Delegated Regulation: Reinstatement of market access for Fiji (request by GUE/NGL and Greens/EFA groups to reject Commission delegated act) - Motion for resolution : vote: resolution

Against

source: www.votewatch.eu , www.europarl.europa.eu

29

Figure A1 Left-wing parties: protectionist score based on MEP votes on international trade in the European

Parliament, 2014-2017, and CHES anti-EU score

Figure A2 Right-wing parties: protectionist score based on MEP votes on international trade in the European

Parliament, 2014-2017, and CHES anti-EU score

30

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