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May 16, 2018

The higher the unemployment rates in Western European countries, the more likely it is that socio-political destabilization will occur. At the same time, the highest levels of unemployment in Eastern European countries are accompanied by anti-government protests of very low intensity. This is just one of the conclusions made by HSE experts in their paper 'Unemployment as a predictor of socio-political destabilization in Western and Eastern European countries'.

The scholars analyzed the World Bank's data on unemployment and on socio-political destabilization from the Cross National Time Series (CNTS) database, 1991-2014. Linear correlation was used to compare these data. Scholars from various countries have studied the correlation between unemployment and socio-political destabilization before, but this has led to contradicting conclusions. HSE experts were the first to analyze these factors dividing the countries based on the presence or lack of communist past.

The project examined data from 24 non-post-Communist (Western) European countries, and 21 post-Communist (Eastern) European countries: Western Europe: Andorra, Austria, Belgium, Great Britain, Denmark, Germany, Greece, Ireland, Iceland, Spain, Italy, Cyprus, Lichtenstein, Luxembourg, Malta, Monaco, the Netherlands, Norway, Portugal, San Marino, Finland, France, Sweden, and Switzerland. Eastern Europe: Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Hungary, Kosovo, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Ukraine, Croatia, Czech Republic, and Estonia.

The analysis used indicators such as socio-political destabilization as political assassinations, political strikes, big terrorist attacks and (or) 'guerilla actions', government crises, purges, riots, coups d'etats and coup attempts, anti-government demonstrations, and an aggregated index of socio-political destabilization. The calculations for Western European countries showed a positive correlation with all these indicators except for purges. This means that the higher the unemployment rate, the higher the rate of socio-political destabilization.

The scholars carried out decile analysis. They divided all the countries studied into 10 equal groups according to unemployment level, and then calculated the mean value for all destabilization indicators in each of the groups. This approach uses not specific countries, but groups of countries as a unit for comparison. The scientists detected that in 10% of countries with maximum levels of unemployment (over 12.1%) approximately four anti-government demonstrations happen annually.

The situation in Eastern European (post-Communist) countries is markedly different. The researchers did not identify a positive statistically significant correlation with any of the nine indicators of socio-political destabilization, which means the higher the unemployment, the less often the people protest.

The decile analysis demonstrated that more than one large-scale anti-government demonstration occurs every five years in Eastern European countries with minimal levels of unemployment. Comparatively, they found that less than one demonstration occurs every five years in countries with maximum unemployment rates (over 23.8%).

Reasons for Protests

The experts looked into the motivations for participating or not participating in protests, based on a preliminary study by Sergey Tsirel, one of the co-authors. They concluded that the unemployed have the following reasons for not participating in protest actions:
  • Feeling like a small neglected person who is afraid to speak up against power and society;

  • The need to spend time looking for a job, making money and supporting the family (spouse, children, parents etc);

  • The fear of being blacklisted by the police and especially employers as a rebel and a undesirable candidate for a job;

  • The fear of losing favour among supporters (including family, clan and community leaders) who provide money, loans, and part-time jobs.
However, the unemployed have the following reasons for participating in protests:
    Anger toward their former employers who fired them, as well as potential employers who denied them a job or offered a job and a salary which did not meet their qualifications and ambitions;

    Anger toward the government which implemented an economic policy that led to their unemployment;

    Anger toward the government which established unemployment benefits that are insufficient, regulations around receiving benefits that are too strict, and periods of payment that are too short;

    Free time allowing them to participate in politics and protests.
There are many reasons and circumstances that may direct an unemployed person or potentially unemployed person to participate or not participate in a protest. However, if the situation in a particular country is far from being revolutionary and the regime is far from collapsing, the key factor was found to be the presence or lack of the source of subsistence. According to researchers, the main reason for such contrasting reactions to growing unemployment among Western and Eastern Europeans is the difference in unemployment benefit rates. In the countries where unemployment benefits and the period of their payment are large (Western Europe), growing unemployment is accompanied by growing support for protests and participation in anti-government demonstrations. In countries with low benefits and short periods of payments (Eastern Europe), the people who lose their jobs mostly care about their personal problems and are less inclined to participate in protests if they have lost their job or are at a high risk of losing it.

An additional factor that results in differences in reactions demonstrated by Western and Eastern Europeans to losing a job is labour migration from Eastern to Western Europe. It 'dilutes' the 'fuel' for protests in the East and meanwhile contributes to protests among the Western European unemployed who support anti-immigrant laws.

'Migration waves after 2014, of course, influenced the protests, causing specific anti-immigrant protests. According to preliminary data, this may increase with growing unemployment in Western Europe', added Andrey Korotaev, one of the study authors and Head of the HSE Laboratory for Monitoring the Risks of Socio-Political Destabilization.

The danger of growing unemployment in developed economies is currently rather high. It may be caused by relocating product manufacturing to poorer countries with smaller salaries and social benefits, as well as by growing automation and robotization not only in production, but also in the service sector. At the same time, some of the Western countries are planning to introduce a 'basic income' for its citizens that doesn't depend on their employment. HSE experts conclude in their study that paradoxically, a very probable result of such policies, despite a certain decrease in income inequality, may be growing protest activities. And conversely, if there is no considerable growth of salaries and social benefits in Eastern European countries, the growing unemployment is not expected to impact protest activity, despite a certain increase in inequality.

National Research University Higher School of Economics

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