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

Rafael Di Tella and Dani Rodrik

No 25705, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: F16 (search for similar items in EconPapers)
Date: 2019-03
New Economics Papers: this item is included in nep-int
Note: ITI LS PE POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published as Rafael Di Tella & Dani Rodrik, 2020. "Labour Market Shocks and the Demand for Trade Protection: Evidence from Online Surveys," Economic Journal, Royal Economic Society, vol. 130(628), pages 1008-1030.

Downloads: (external link)
http://www.nber.org/papers/w25705.pdf (application/pdf)

Related works:
Journal Article: Labour Market Shocks and the Demand for Trade Protection: Evidence from Online Surveys (2020)
Working Paper: Labour Market Shocks and the Demand for Trade Protection: Evidence from Online Surveys (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:25705

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25705

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().