Instrumental Variables and Causal Mechanisms: Unpacking the Effect of Trade on Workers and Voters

Robert Gold, Christian Dippel, Stephan Heblich and Rodrigo Pinto

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We identify how German voters responded to the labor market turmoil caused by increasing trade with low-wage manufacturing countries. We first establish that import competition increased voters’ support for only extreme (right) parties. We then decompose this populist ‘total effect’ of trade on voting into a ‘mediated effect’ running through labor market adjustments and an independent ‘direct effect’. Our Causal Mediation Analysis reveals that direct and indirect effect work in opposite directions.

JEL-codes: C36 D72 F16 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-cdm, nep-int and nep-pol
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Citations: View citations in EconPapers (60)

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Related works:
Working Paper: Instrumental Variables and Causal Mechanisms: Unpacking the Effect of Trade on Workers and Voters (2017)
Working Paper: Instrumental Variables and Causal Mechanisms: Unpacking The Effect of Trade on Workers and Voters (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168152

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