The United Kingdom referendum on European Union membership on 23 June 2016 is thought to have been a watershed moment in European integration and globalisation more broadly. Even though the outcome had been expected to be tight, in the days running up to the referendum bookmakers and pollsters predicted the Remain side to win. Many observers were left puzzled and keen to understand who voted for Leave. Various newspapers and blogs quickly produced correlations between selected variables and the referendum result, but no study has so far taken a comprehensive approach to attempting to understand the Brexit vote.
READ THE WHOLE PAPER
Our approach In particular, we study the EU referendum result in England, Wales and Scotland disaggregated across 380 local authorities (and across 107 wards across in cities) and relate this to fundamental socio-economic features of these areas. We focus on socio-economic characteristics that can be broadly grouped into five categories: political variables, measures of an area’s exposure to the Euro- pean Union, measures capturing (the quality of) public services provision and exposure to fiscal consolidation (austerity), demographic and human capital characteristics as well as measures capturing the underlying economic structure of an area.
Our results indicate that even very simple empirical models can explain significant amounts of variation in the Vote Leave share and achieve good prediction performance. In particular, we highlight that the simplest model contain- ing only six explanatory variables capturing electoral preferences as measured by the 2014 European Parliamentary elections explain almost 92 percent of the variation in the support for Leave across local authority areas. This suggests that understanding the evolution of political preferences over time in the UK can provide a unique window into understanding the causal mechanisms that ultimately caused a referendum to be held in the first place.
What socio-economic characteristics do have significant explanatory power for the Leave support? Surprisingly and contrary to much of the political de- bate in the run-up to the election, we find that relatively little variation in the Vote Leave share can be explained by measures of a local authority area’s exposure to the European Union (e.g., due to immigration and trade exposure) as well as measures capturing the quality of public services and fiscal consolidation. Rather, a significant amount of the variation can be linked to a range of variables that we can think of as hardly malleable in the short run by political choices (variables such as educational attainment, industry structure and demography).
We document that similar patterns hold when exploring data on the EU referendum result across 107 wards in four English cities, which this paper is the first to exploit. Our findings suggest that there is a disconnect between the key correlates of the vote outcome and the topics dominating the political debate in the run-up to the election, in particular the fiscal burden of EU membership and the exposure to European migration.
How can we reconcile this disconnect? The political debate centred on two issues: the fiscal burden of EU membership, which voters may have inadvertently evaluated against the sizeable extent of domestic welfare and benefits cuts since the financial crisis, and the exposure to European migration since the enlargement of the European Union in 2004. If we think of migration and fiscal cuts as political choice variables, we can explore the extent to which the power- ful predictors capturing the underlying fundamentals (educational attainment, demography and industry structure) interact with these variables that saw sig- nificant change over the course of the last decade. Our results highlight that policy choices related to pressure from immigration, fiscal cuts and the housing market are linked to a higher Vote Leave share especially when socio-economic fundamentals are ‘weak’ (low incomes, high unemployment), and when the lo- cal population is less able to adapt to adverse shocks (due to low qualifications and a rising age profile).
Migration and austerity were, at least to some extent or at some point in time, political choice variables. We perform a set of back-of-the-envelope calculations based on our estimated models to relate how different choices may have affected the referendum result. The analysis suggests that just a slightly less harsh regime of austerity aimed at cutting benefits could have substantially reduced support for the Vote Leave campaign and overturned the result of the EU referendum. A reduction in migration from Eastern Europe, which could have been achieved by opting to phase in freedom of movement in 2004 (which much of the rest of Europe did), could have also reduced the margin of victory for the Leave campaign, but would have been unlikely to overturn the referendum result.
Referendum on a rainy day? Lastly, we also explore the role of some short-run factors such as the heavy rainfall and flooding on the referendum day as well as train cancellations in the South East of England. While we document that these did have a reducing effect on turnout, the reduction does not seem to have affected the overall result: the Remain campaign would still have lost on a sunny day.
While our overall results resonate with the anecdotal evidence presented elsewhere, our results point towards two important dimensions that have so far received little attention. First, we show that domestic policy could have counteracted the support for Vote Leave. Our (speculative) back-of-the-envelope calculations suggest that even just a slightly more moderate regime of austerity could have substantially reduced support for the Vote Leave campaign, which cited questionable figures of the fiscal cost of EU membership.
Second, we highlight that the British first-past-the-post electoral system may have significantly contributed to the emerging chasm in British politics on EU membership. Anti-EU parties, in particular the UK Independence Party (UKIP), have seen strong popular support in European Parliament elections that are based on proportional representation. However, despite significant popular support for UKIP, the party is essentially not represented in the national parliament, implying that a significant share of voters lack formal access to the political system through representation of their views. At the same time, the strong popular support has rightfully attracted media attention. But it has come with no obligation for far-right politicians to assume roles of responsibility towards their electorate by exercising executive power. Instead, political entrepreneurs within the established parties (Labour and especially the Conservative Party) have reached out to UKIP voters in an attempt to strengthen their position within the party, putting significant strain on the internal cohesiveness of their respective parties.
Becker, S. O., Fetzer, T., & Novy, D. (2016). Who Voted for Brexit ? A Comprehensive District-Level Analysis. CAGE Working Paper 305.
Becker, S. O., & Fetzer, T. (2016). Does Migration Cause Exteme Voting? CAGE Working Paper 306.