FROM PAYCHECKS TO POLITICS Assessing how the productivity-pay gap impacts populist voting patterns in Germany

Abstract

This thesis investigates the relationship between the productivity-pay gap and populist voting patterns in Germany, focusing specifically on the vote share of the far-right populist party Alternative für Deutschland (AfD). While previous research has examined the causes of the productivity-pay gap and the drivers behind the rise of populism, no studies to date appear to have explored the potential link between these two phenomena. Using a quantitative approach, the study constructs a productivity-pay gap index across German NUTS 2 regions for the years 2013, 2014, 2017 and 2019, and compares it with AfD electoral support in federal and European Parliament elections. A multivariate OLS regression analysis is conducted, incorporating control variables such as regional GDP, unemployment and education level. The results show no statistically significant relationship between the size of the productivity-pay gap and higher vote share of the AfD, leading to the rejection of the alternative hypothesis in favour of the null hypothesis. Despite this, the thesis contributes to the limited European-focused literature on the productivity-pay gap and offers a foundation for future studies to further explore the political consequences of rising economic inequality.