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How do changes to the local economy affect the politics of a region? We develop a theory that ties together internal migration, informal social institutions (such as churches and family), and voters’ preferences for social insurance spending. Local social institutions provide some insurance against adverse life events such as job loss. This has two effects: first, those with strong social networks prefer lower taxes and spending on social insurance, since they have access to group-based social insurance through social institutions. Second, these ties create an incentive for people stay in a declining region, rather than relocating to pursue better economic opportunities. Combining these two mechanisms, the theory predicts that localized economic shocks have heterogeneous effects on a region’s political preferences according to the strength of social ties in the region. Regions with dense social institutions will have muted migratory responses to negative economic shocks relative to regions with weaker social institutions. Moreover, those who remain in declining regions will be more conservative than those who migrate, limiting voters' demand for government intervention in declining regions. We test these predictions using historical and contemporary data on local labor markets, internal migration, and election outcomes.