Economic Insecurity and the Globalization of Production

A common claim in debates about globalization is that economic integration increases worker insecurity. Although this idea is central to both political and academic debates about international economic integration, the theoretical basis of the claim is often not clear. There is also no empirical research that has directly tested the relationship. In this paper, we argue that economic insecurity among workers may be related to riskier employment and/or wage outcomes, and that foreign direct investment may be a key factor contributing to this increased risk by making labor demands more elastic. We present new empirical evidence, based on the analysis of panel data from Great Britain collected from 1991-1999, that FDI activity in the industries in which individuals work is positively correlated with individual perceptions of economic insecurity. This relationship holds in yearly cross-sections, in a panel accounting for individual-specific effects, and in a dynamic panel model also accounting for individual-specific effects.

Labor-Market Competition and Individual Preferences Over Immigration Policy

This paper uses an individual-level data set to analyze the determinants of individual preferences over immigration policy in the United States. In particular, we test for a link from individual skill levels to stated immigration-policy preferences. Different economic models make contrasting predictions about the nature of this link. We have two main empirical results. First, less-skilled workers are significantly more likely to prefer limiting immigrant inflows into the United States. The result is robust to several different econometric specifications which account for determinants of policy preferences other than skills. Our finding suggests that over time horizons relevant to individuals when evaluating immigration policy, individuals thank that the U.S. economy absorbs immigrant inflows at least partly by changing wages. These preferences are consistent with a multi-cone' Heckscher Ohlin trade model and with a factor-proportions-analysis labor model. Second that less-skilled workers in high-immigration communities are especially anti-immigrationist. If anything, our evidence suggests attenuation of the skills-preferences correlation in high-immigration communities. These preferences are inconsistent with an area-analysis labor model.

Public Finance and Individual Preferences over Globalization Strategies

In the absence of distortionary tax and spending policies, freer immigration and trade for a country would often be supported by similar groups thanks to similar impacts on labor income. But government policies that redistribute income may alter the distributional politics. In particular, immigrants may pay taxes and receive public services. Imports, obviously, can do neither of these. This suggests quite different political coalitions may organize around trade and immigration. In this paper we develop a framework for examining how pre-tax and post-tax cleavages may differ across globalization strategies and also fiscal jurisdictions. We then apply this framework to the case of individual immigration and trade preferences across U.S. states. We have two main findings. First, high exposure to immigrant fiscal pressures reduces support for freer immigration among natives, especially the more-skilled. Second, there is no public-finance variation in opinion over trade policy, consistent with the data that U.S. trade policy has negligible fiscal-policy impacts. Public-finance concerns appear to be crucial in shaping opinions towards alternative globalization strategies.

Public Finance and Individual Preferences Over Globalization Strategies

In the absence of distortionary tax and spending policies, freer immigration and trade for a country would often be supported by similar groups thanks to similar impacts on labor income. But government policies that redistribute income may alter the distributional politics. In particular, immigrants may pay taxes and receive public services. Imports, obviously, can do neither of these. This suggests quite different political coalitions may organize around trade and immigration. In this paper we develop a framework for examining how pre-tax and post-tax cleavages may differ across globalization strategies and also fiscal jurisdictions. We then apply this framework to the case of individual immigration and trade preferences across U.S. states. We have two main findings. First, high exposure to immigrant fiscal pressures reduces support for freer immigration among natives, especially the more-skilled. Second, there is no public-finance variation in opinion over trade policy, consistent with the data that U.S. trade policy has negligible fiscal-policy impacts. Public-finance concerns appear to be crucial in shaping opinions towards alternative globalization strategies.

The German Trade Shock and the Rise of the Neo-Welfare State in Early Twentieth-Century Britain

We study the international origins of the neo-welfare state in Britain during the era of globalization before World War I. We introduce a new mechanism linking trade to the expansion of the state. In addition to increasing assessments of the volatility of employment in a market economy, trade shocks changed beliefs about the deservingness of the poor. Employing a shift-share measure of local exposure to German imports, we show that rising imports caused worse labor market outcomes from 1880 to 1910. Import competition led to a decrease in support for the Conservative Party in national elections after 1900, when the Liberal Party supported welfare state reforms. We further show that rising imports increased the use in local newspapers of scientific terms like “unemployment” relative to pejorative terms like “vagrancy” to describe the poor. Political responses to globalization helped shape voter support for the modern British welfare state at its inception

Foundations of a New Democracy: Schooling, Inequality, and Voting in the Early Republic

Democratic theorists have long argued that states can create more resilient democracies through education. Educational investments are thought to produce more economic equality and instill in citizens greater capacity and responsibility to participate in politics. Using a geographic regression discontinuity design and township-level data from Antebellum New York State, we examine whether state funding for common schools led to higher voter turnout as well as higher earnings and lower inequality. Our estimates support the view that a participatory democratic culture emerged not only because of initial favorable endowments but also because of subsequent government decisions to fund education. New York townships that received more school funding later had higher median earnings, lower earnings inequality, and higher levels of voter turnout. Our findings support the view that maintaining democracy requires active investments by the state, something that has important implications for other places and other times—including today

Interests, Norms, and Support for the Provision of Global Public Goods: The Case of Climate Cooperation

Mitigating climate change requires countries to provide a global public good. This means that the domestic cleavages underlying mass attitudes toward international climate policy are a central determinant of its provision. We argue that the industry-specific costs of emission abatement and internalized social norms help explain support for climate policy. To evaluate our predictions we develop novel measures of industry-specific interests by cross-referencing individuals? sectors of employment and objective industry-level pollution data and employ- ing quasi-behavioral measures of social norms in combination with both correlational and conjoint-experimental data. We find that individuals working in pollutive industries are 7 percentage points less likely to support climate cooperation than individuals employed in cleaner sectors. Our results also suggest that reciprocal and altruistic individuals are about 10 percentage points more supportive of global climate policy. These findings indicate that both interests and norms function as complementary explanations that improve our under- standing of individual policy preferences

Envy, Altruism, and the International Distribution of Trade Protection

One important puzzle in international political economy is why lower-earning and less-skilled intensive industries tend to receive relatively high levels of trade protection. This pattern of protection holds even in low-income countries in which less-skilled labor is likely to be the relatively abundant factor of production and therefore would be expected in many standard political-economy frameworks to receive relatively low, not high, levels of protection. We propose and model one possible explanation: that individual aversion to inequality—both envy and altruism—lead to systematic differences in support for trade protection across industries, with sectors employing lower-earning workers more intensively being relatively preferred recipients for trade protection. We conduct original survey experiments in China and the United States and provide strong evidence that individual policy opinions about sector-specific trade protection depend on the earnings of workers in the sector. We also present structural estimates of the influence of envy and altruism on sector-specific trade policy preferences. Our estimates indicate that both envy and altruism influence support for trade protection in the United States and that altruism influences policy opinions in China.

Local economic shocks from globalisation are linked to an increase in authoritarian values and the Brexit vote

Voters who hold authoritarian values were more likely to vote Leave in the 2016 Brexit referendum. Cameron Ballard-Rosa, Mashail A. Malik, Stephanie J. Rickard and Kenneth Scheve show that these values are in turn related to long-term economic shocks associated with globalisation, by using data on the varied effect of changes in Chinese imports on the labour market across Britain