Brexit's 'Leave' Votes Came Amid High Inequality

History might well remember 2016 as the year populism swept the developed world. While that's a political phenomenon, it's underpinned by economic trends.

Income inequality seems to have played a role in Britain's June 23 vote to leave the European Union, a move seen as a populist reaction against immigration, based on new research from Brussels-based Bruegel. In the U.S., Republican Donald Trump has tapped into frustrations about lower-quality jobs with stagnating wages – and new research from White House economists shows why his rallying cry might hold so much appeal.

This week's research wrap also takes a look at China's housing market and a quirk in Census Data. Check this roundup each week for the latest on interesting and influential economic work from around the globe.

In areas of the U.K. with higher inequality and poverty, voters were more likely to support Brexit, according to the Bruegel analysis. The finding is a sign that high inequality can "boost protest votes in referenda and elections," the authors write. "This is another key lesson that politicians in other countries should learn from the Brexit vote."

One percentage point of higher income inequality, as measured by the Gini coefficient, boosted the share of 'leave' votes by about 0.9 percentage point, the researchers' findings implied.