Thursday, November 12, 2009

Does unemployment affect midterm elections?

I've seen no small amount of hand-wringing from Democrats worried about the impact of the current double-digit unemployment on next year's midterm elections. By most estimates, even if there is robust economic growth for the next year, unemployment will still be quite high a year from now, maybe upwards of eight percent.* What kind of effect could this have on the election?

Actually, there's not much evidence unemployment has any effect at all. I grabbed the annual figures on unemployment from the Bureau of Labor Statistics and looked at unemployment as a predictor of midterm House seat gains for the president's party since 1950. Here's the scatterplot. The points are labeled by year and the name of the incumbent president.
What do we see here? Basically no relationship at all. Reagan saw very high unemployment in 1982, and his party lost a lot of seats, but no more than the president's party did under Bush in 2006 or Truman in 1950, when unemployment was pretty low.

Okay, so what about the growth in unemployment between the year before the election and the election year? Here's that scatterplot:Again, bubkes. Unemployment actually increased prior to the 2002 elections, but that was the biggest gain for the president's party in this whole time series. Similarly, the biggest loss by the president's party was in 1994, when unemployment had shrunk.

What does seem to matter is economic growth. Here's one measure, the growth in real disposable personal income between the third quarter in the year before the election and the second quarter of the election year. (Data from the Bureau of Economic Analysis.)
It's a noisy measure, to be sure, but it is statistically significant. You can specify income growth several different ways and still get a similar result. Something else that matters is the president's popularity. A ten-point increase in the president's Labor Day Gallup approval rating can save the president's party 16 seats in the House.

So why might income growth matter but unemployment not matter for elections? It's possible that unemployment fluctuations disproportionately affect people at the lower end of the income spectrum -- people who aren't terribly likely to vote in midterms and, if they do, are probably voting Democratic anyway. Growth in disposable income, however, affects everybody, including the moderate voters who will switch party allegiances from time to time.

*Nate Silver estimates the unemployment rate will be around 9.5 percent by next November.


PJN said...


Do you have the the r value for the disposable income correlation? I really don't see how you get significance from the look of that chart. Thanks

Seth said...

PJN, the R-squared for the bivariate equation is .129. Not terribly high. I should have been more clear about this, though: the relationship is statistically significant only when you also control for presidential approval. Then the R-squared goes up to .595 and both coefficents are statistically significant at the p≤.05 level.

Atrios said...

how about running the same things on total congressional turnover, how many incumbents, no matter what the party, were voted out.

PJN said...

Controlling for presidential approval? You're charting "house gains for presidents party". It would seem that if you strip pres app from pres party you strip everything but noise, which as you say there's a lot of to start with, and there happens to be a correlation somewhere. What seems to be the implication of these charts is that current economic conditions v pres party hsve little if any infuence on midterms. This might be because voters think about the big things (the economy, stupid) at major elections, but midterms they prefer to register opinions on something else. Would be good to see those charts for presidential election years.

Been reading the rest of your posts though and they're good and I will continue to read you in future. And I'm with you on the 39.

Seth said...

Atrios, that's an interesting question. I'm assuming overall turnover and House seat gains for the president's party are highly correlated, but not quite the same thing. I'll try to collect those data.

PNJ, I disagree that if you control for presidential approval you've stripped out everything but noise. Presidential approval matters, but it's not the only thing that does. Eisenhower and Ford were pretty popular in '58 and '74, respectively, but their party still took a bath in the midterms. The economy helps explain that.

I think you're right that the impact of the economy on the congressional vote is stronger in presidential years, but it's not nothing in the midterms.

Matt Jarvis said...

Generally, I've favored RDI in my models as well, following in Jacobson's footsteps. However, I forget the cite, but I've seen others use and I have also used RDI for the Reps and unemployment for the Dems. Sure, one could supply a logic for that (Reps care about inflation and Dems care about unemployment, and so would those who might consider voting for them), but I think it's mostly been done (as it was in my case) out of pure data-fitting. (I was predicting biannual approval numbers for both Congress and the President from 1946-2000, and that bifurcation had a little purchase for me)

Anonymous said...

So, a couple things.

One thing you need to control for is how many seats the president's party has, or else you need to do it by "seats won" rather than "gains/losses" as this makes no sense without seeing how many seats they've gotten. Also, the Dems lose about 8 seats on average during midterms (probably not statistically significant tho'), which leads me to the last problem, that the sample size is too small and American politics have changed too much (particularly in the south) to draw a statistically significant inference. That Bush '02 shows up as a key counterexample is telling. Obviously, the 9/11 effect dominated the weak economy, and Republican gains/losses were also helped out by the fact the Republicans didn't start off with a large majority in 2002...

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