Working Paper: CEPR ID: DP12897
Authors: Sergei Guriev; Daniel Treisman; Cevat Giray Aksoy
Abstract: How does international trade affect the popularity of governments and leaders? We provide the first large-scale, systematic evidence that the divide between skilled and unskilled workers worldwide is producing corresponding differences in the response of political preferences to trade shocks. Using a unique data set including 118 countries and nearly 450,000 individuals, we find that growth in high skill intensive exports (of goods and services) increases approval of the leader and incumbent government among skilled individuals. Growth in high skill intensive imports has the opposite effect. High skill intensive trade has no such effect among the unskilled. To identify exogenous variation in international trade, we exploit the time-varying effects of air and sea distances on bilateral trade flows. Our findings suggest that the political effects of international trade differ with skill intensity and that skilled individuals respond differently from their unskilled counterparts to trade shocks.
Keywords: international trade; political approval; skill intensity of trade
JEL Codes: D72; F14; G02; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| high skill intensive exports (F14) | confidence in government among skilled individuals (D73) |
| high skill intensive imports (F14) | confidence in government among skilled individuals (D73) |
| low skill intensive exports (F66) | confidence in government among unskilled individuals (D80) |
| low skill intensive imports (F66) | confidence in government among unskilled individuals (D80) |
| trade flows (F10) | political approval (D72) |