Working Paper: NBER ID: w21812
Authors: Christian Dippel; Robert Gold; Stephan Heblich
Abstract: We identify the causal effect of trade-integration with China and Eastern Europe on voting in Germany from 1987 to 2009. Looking at the entire political spectrum, we find that only extreme-right parties respond significantly to trade integration. Their vote share increases with import competition and decreases with export access opportunities. We unpack mechanisms using reduced form evidence and a causal mediation analysis. Two-thirds of the total effect of trade integration on voting appears to be driven by observable labor market adjustments, primarily changes in manufacturing employment. These results are mirrored in an individual-level analysis in the German Socioeconomic Panel.
Keywords: trade integration; voting behavior; labor market adjustments; Germany
JEL Codes: D72; F16; J2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| trade integration with China and Eastern Europe (F15) | voting behavior in Germany (D72) |
| import competition (L13) | vote share of extreme right parties (D72) |
| export access opportunities (F10) | vote share of extreme right parties (D72) |
| trade exposure (F14) | labor market adjustments (J48) |
| labor market adjustments (J48) | voting behavior in Germany (D72) |
| changes in manufacturing employment (O14) | labor market adjustments (J48) |
| local labor market conditions (J29) | voting behavior in Germany (D72) |