Economic Insecurity Increases Affective Polarization and Outgroup-Aversion

Affective polarization --- a deep emotional divide between opposing social and political groups --- has become a pressing global governance challenge, disrupting both democratic processes and policy uptake. While some degree of position polarization should be expected in a healthy, multi-party political system, the factors driving recent extremes in divisions remain unclear. One candidate factor, economic instability, has been frequently linked to rising polarization, but causal evidence to date has been limited. Using panel survey data from the Netherlands and a difference-in-differences design, we show that economic insecurity significantly increases affective polarization. The effect persists for years, with a longer (though slower) expression among men. It is also accompanied by increased distrust and social group clustering. Our findings suggest that economic insecurity is a key driver of polarization, highlighting the role of labor market stability in shaping political and social cohesion.