The Impact of Job Growth and Inflation on Presidential Elections

This study seeks to identify the economic forces and structural variables that influence the share of the popular vote received by incumbent political parties for the 17 elections over the 1956-2020 period. The regression findings show that percentage changes over differing time periods prior to the election in employment and the CPI are highly significant in explaining the share of the popular vote received by presidential candidates. The share of the popular vote received by third parties did not significantly affect the outcome of any of the presidential elections in our sample. The optimal look-back period was explored to measure the cumulative impact of the percentage change on employment and the CPI. The findings suggest that voters have a longer recall for job versus price changes. Finally, simulations are presented to forecast the share of the popular vote for the presidential candidate of the incumbent party in the 2024 election.