Does Parental Unemployment Cause Right-Wing Extremism

Recent years have witnessed a rise in right-wing extremism among German youth and young adults. This paper investigates the extent to which the experience of parental unemployment during childhood affects young people’s far right-wing attitudes and xeno-phobia. Estimates from three German data sets show a positive relationship between growing up with unemployed parents and right-wing extremism, with xenophobia in par-ticular. This paper uses stark differences in unemployment levels between East and West Germany, both before and after reunification, to investigate a causal relationship. Instru-mental variables estimates suggest strong and significant effects of parental unemployment on right-wing extremism. Various panel estimates also point to a positive relationship. The results are consistent with classical theories of economic interest and voting behavior which predict that persons who develop feelings of economic insecurity are more suscep-tible to right-wing extremism and anti-foreign sentiments