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Cited by 21Global trade and economicsSocial Policy and Reform StudiesPopulism, Right-Wing Movements

Labor Market Shocks and the Demand for Trade Protection: Evidence from Online Surveys

Open access
Di Tella, Rafael, Rodrik, Dani·2019·National Bureau of Economic Research
DOI 10.3386/w25705
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Abstract

We study preferences for government action in response to layoffs resulting from different types of labor-market shocks. We consider the following shocks: technological change, a demand shift, bad management, and three kinds of international outsourcing. Respondents are given a choice among no government action, compensatory transfers, and trade protection. In response to these shocks, support for government intervention generally rises sharply and is heavily biased towards trade protection. Demand for import protection increases significantly in all cases, except for the “bad management” shock. Trade shocks generate more demand for protectionism, and among trade shocks, outsourcing to a developing country elicits greater demand for protectionism than outsourcing to a developed country. The “bad management” shock is the only scenario that induces a desired increase in compensatory transfers. Effects appear to be heterogeneous across subgroups with different political preferences and education. Trump supporters are more protectionist than Clinton supporters, but preferences seem easy to manipulate: Clinton supporters primed with trade shocks are as protectionist as baseline Trump voters. Highlighting labor abuses in the exporting country increases the demand for trade protection by Clinton supporters but not Trump supporters.

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  • The concentrated impact of the China shock on specific industries and regions makes the economic consequences of trade acutely recognizable and therefore politically salient.

    “The concentrated impact of the China shock on specific industries and regions makes the economic consequences of trade acutely recognizable and therefore politically salient (Margalit 2011; Di Tella and Rodrik 2019).”

    From Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure (2020) · cites this paper as Di Tella and Rodrik 2019

    The Introduction links trade-related job losses to manufacturing, discusses China's trade shock, and says shocks to local labor markets can produce political reactions. It does not say that the China shock's concentration in particular industries and regions makes its consequences more recognizable or explains its political salience. The indexed passages provide section labels but no page numbers. (LLM, conf=0.82)

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Cites

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Research works printed but not linked: 27

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Cited by

Sorted by citations

Authors
Di Tella, R., & Rodrik, D.
Affiliations
Harvard University (US)
ORCID
Rodrik, Dani
Venue
National Bureau of Economic Research
Publisher
National Bureau of Economic Research
Published
2019-03
DOI
10.3386/w25705
OpenAlex
W2931197808
Cited by
21
References
2
Citations by year
2024: 1 · 2023: 2 · 2022: 2 · 2021: 8 · 2020: 5 · 2019: 3
Type
report
Language
en
Open access
Locations
  • National Bureau of Economic Research (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
  • Social Sciences › Political Science and International Relations › Social Policy and Reform Studies
  • Social Sciences › Political Science and International Relations › Populism, Right-Wing Movements
Keywords
protectionism, labor market shocks, layoffs, outsourcing, technological change, demand shocks, bad management, compensatory transfers, partisanship, Trump voters, labor abuse, developing countries

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