TRADE LIBERALIZATION AND RACIAL ANIMUS

Alberto Ortega, Ema Di Fruscia and Bryn Louise

Contemporary Economic Policy, 2021, vol. 39, issue 1, 194-204

Abstract: Since the year 2000, the number of recorded hate groups in the United States has increased by more than 50 %. Some argue that the strain caused by unemployment or other socioeconomic stressors can play a critical role in the prevalence of extremist groups and crimes. We examine whether a change in U.S. policy to normalize trade relations with China, which fueled a surge in import competition that led to higher levels of unemployment, affected the presence of hate crimes. Using a difference‐in‐differences model and an event‐study framework, we find that areas most exposed to import competition experienced an increase in the number of anti‐Black hate crimes. We also find a qualitatively similar effect on the number of active hate groups in response to import competition. This result holds pre‐ and post‐the Great Recession and is consistent across levels of aggregation. The results are consistent and robust to various controls and specifications. (JEL F13, F16, Z13)

Date: 2021
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