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The impact of the 1932 General Tariff: a difference-in-difference approach

Simon Lloyd and Solomos Solomou ()
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Solomos Solomou: University of Cambridge

Cliometrica, 2020, vol. 14, issue 1, No 2, 60 pages

Abstract: Abstract We evaluate the effect of the 1932 British General Tariff on the output, labour productivity and employment growth of British industries. We provide a new disaggregated data set that matches industry-level Census of Production data with industry-specific tariff rates to accurately isolate treatment and control groups and estimate the effect of the General Tariff using difference-in-difference regressions. We evaluate a two-group comparison, between newly and non-newly protected industries, and a three-group comparison, between non-newly protected industries and newly protected industries further divided into those given a baseline 10% tariff rate and those given additional tariffs. In the two-group comparison, we identify a tariff effect that is large and statistically significant on output and productivity. In the three-group comparison, we show that the positive output and productivity effects of the tariff arise from the additional tariff protection, over and above the 10% level. These effects are observed over the periods 1930–1935 and 1930–1948, suggesting both short-run and medium-term effects on output and productivity of UK industries protected by the 1932 General Tariff.

Keywords: Trade policy; General Tariff; Difference-in-difference (search for similar items in EconPapers)
JEL-codes: F13 N64 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s11698-019-00184-z

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