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Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure
... Globalization , automation Acemoglu and Restrepo, 2020), broader secular shifts (Austin et al., 2016;Charles et al., 2019), and now the energy transition (Hanson, 2022) have caused local labor markets specialized in manufacturing to lose parts of their industrial core, leading to persistently lower earnings and employment rates, especially among non-college adults (Chetverikov et al., 2016;Amior and Manning, 2018;Abraham and Kearney, 2020). The entrenchment of economic distress has engendered social dislocation (Wilson, 2011), as manifested by locally elevated incidences of mortality (Pierce and Schott, 2020), single parenthood and child poverty (Autor et al., 2019), and political extremism (Colantone and Stanig, 2018b;Autor et al., 2020;Rodrik, 2020). ...
... Yet, it is still uncommon for quantitative models to differentiate among workers beyond their initial sector and region. The concentrated impacts of import penetration by China on the employment of non-college native-born white workers, for instance, may partially account for the documented connection between regional trade exposure and greater support for political extremism, especially on the right (Colantone and Stanig, 2018a,b;Autor et al., 2020). Allowing for greater worker heterogeneity would potentially enrich quantitative trade models (akin perhaps to the analytical insights gained from introducing firm heterogeneity). ...
... Nearly two decades after China's 2001 WTO accession, the employment prevalence of native-born white male non-college workers in trade-exposed labor markets falls by 8 log points among workers age 40-64 per +1σ exposure, and by 5.2 log points among workers age 18-39. Though these patterns convey no normative content, they may contextualize the perception among non-college native-born voters (particularly males) that rising trade pressure contributes to a loss of traditional labor market roles (Autor et al., 2020;Bonomi et al., 2021;Grossman and Helpman, 2021;Bouët et al., 2024). ...
... Recent research has revealed significant heterogeneity in polarization patterns across regions and sectors. Autor et al. (2020) documented substantial variation across U.S. metropolitan areas, finding that local labor market conditions significantly influence polarization dynamics. Similarly, Heyman (2016) identified diverse patterns across European countries, suggesting that institutional frameworks and industrial structures mediate the impact of technological change. ...
... Our employment measures are constructed following the methodology of Autor et al. (2020), with employment shares calculated at both the occupation and skill-level for each country-year observation. Following Acemoglu and Autor (2011), we classify occupations into three skill categories (high, medium, low) based on educational requirements and task complexity. ...
... For each specification s, we estimate: ln(E_{ijkt}^s) = α^s + β ^sC_i + β ^sS_j^s + β ^sA_k^s + β ^s(C_i × S_j^s) + ε_{ijkt}^s (5) where superscript s denotes the alternative specification being tested. We also employ a series of placebo tests following the methodology of Autor et al. (2020) to verify that our results are not driven by spurious correlations. For placebo tests p, we estimate: ln(E_{ijkt}) = α + β C_i + β S_j + β A_k^p + γX_{ijkt} + ε_{ijkt} (6) where A_k^p represents randomly assigned automation risk categories. ...
This paper examines labor market polarization through a comparative analysis of skill-based employment and wage distributions in India and the United States during 2018-2023, with particular attention to differential automation risks and AI preparedness. Using detailed occupation-level data, automation risk metrics, and a series of statistical tests including wage premium analysis, employment share tests, and wage-employment regressions, we document significant structural differences in labor markets between developing and developed economies. Our analysis yields four key findings. First, we find statistically significant differences in employment distribution patterns, with India showing disproportionate concentration in low-skill employment compared to the US, particularly in occupations with high automation risk. Second, regression analysis reveals that wage premiums differ systematically between the two countries, with significantly larger skill-based wage gaps in India. Third, we find robust evidence of a negative relationship between employment size and wages, suggesting stronger labor supply effects in developing economies. Fourth, analysis of occupation-specific automation risk reveals that developing economies face a "double vulnerability" - concentration of employment in both low-skill occupations and jobs with higher automation potential, complicated by lower AI preparedness scores. These findings provide novel empirical evidence on how development stages influence labor market polarization patterns and carry important implications for skill development and technology adoption policies in developing economies. Our results suggest that traditional approaches to labor market development may need significant modification to account for the differential impacts of AI across development stages.
... In general, variance in populist support is often explained with different cultural and economic factors that fuel the demand side of populism. The discussed economic factors often centre around economic insecurities rooted in increased import penetration, labour market competition, and rising income inequality, all associated with progressing globalisation (Autor et al., 2020;Burgoon et al., 2019;Colantone & Stanig, 2018;Dippel et al., 2015;Pástor & Veronesi, 2021;Swank & Betz, 2003). The literature concerned with these effects of globalisation argues that globalisation divides societies into winners and losers, with the latter belonging to less educated and working-class strata (Becker et al., 2017;Kriesi et al., 2008;Teney et al., 2014). ...
... Second, previous research has argued that right-but also left-wing populist voting is a backlash against economic globalisation (see, e.g., Autor et al., 2020;Rodrik, 2018;Swank & Betz, 2003). A particularly prominent explanation is that trade shocks -and especially the "China import shock" -have increased societal polarisation and contributed to populist voting by individuals affected by these shocks (Baccini & Weymouth, 2021;Colantone & Stanig, 2018;Dippel et al., 2017;Jensen et al., 2017;Steiner & Harms, 2021). ...
... Thus, spatial inequality as an economic phenomenon can affect populist voting by activating symbolic predispositions in the form of hostilities towards minority groups. Previous research has already provided evidence for the activation of populist voting potential through economic shocks (Autor et al., 2020;Autor et al., 2016;Colantone & Stanig, 2018;Rodrik, 2018). The only difference is that spatial inequality is a slowly unfolding economic shock, which can remain undetected for a prolonged period of time nevertheless activating symbolic predispositions like nativism. ...
A widely held view is that increasing globalisation and inequality are fostering support for populist actors. Surprisingly, when focusing on Germany and the U.S., populist voting is highest in less globalised regions with rather equal income distributions. Addressing this puzzle, I ask how the regional variance in populist voting can be explained. In my answer, I introduce the concept of spatial inequality, which describes the regional inequality within countries, and construct a measure of public goods scarcity. I argue that the spatial inequality induced feeling of being left behind is positively correlated with populist voting and that this effect is mitigated by public goods provision. Using county level data to develop spatial inequality and public good scarcity indices, I can provide empirical support for these arguments. The findings have important implications for understanding the sub-national variance in populist voting and the role of relative economic deprivation as well as public goods provision.
... For example, Anelli et al. (2021) find that robotization increases nativism, status threats, and cultural traditionalism in Europe. Autor et al. (2020) find that import exposure in the United States (US) in the 2000s increased the popularity of the conservative media and conservative viewpoints. Using an innovative survey experiment, Rhodes-Purdy et al. (2021) show that economic decline induces cultural discontent mediated by economic anger, while cultural discontent, in turn, catalyzes populism. ...
... Here, the Democrats benefited from the discontent of trade victims during the presidential elections before 2012. However, since 2012, Republicans have become more successful in attracting the victims of trade shocks, leading to Trump's 2016 victory(Autor et al. 2020;Che et al. 2016). This aligns with the extant literature showing that centre-left parties are particularly vulnerable to moving toward the right in economic policy(Bagashka et al. 2022;Fervers 2019;Mudge 2018;Snegovaya 2024). ...
The literature on populism is divided on whether economic factors are significant and robust causes of populism. To clarify this, we performed the first systematic review and meta-analysis of the evidence of a causal association between economic insecurity and populism. We combined database searches with searching the citations of eligible studies and recently published reviews. We identified and reviewed thirty-six studies and presented a concise narrative summary and numerical synthesis of the key findings. Although we found significant heterogeneity in several dimensions, all studies reported a significant causal association. A recurrent magnitude was that economic insecurity explained around one-third of recent surges in populism. We tested for publication bias by conducting a funnel-plot asymmetry test and a density discontinuity test of the distribution of t-statistics. We found significant evidence of publication bias; however, the causal association between economic insecurity and populism remains significant after controlling for it.
... 1 Financial Times, 30 August 2018. 2 Factors include rising concerns over immigration, growing income inequality, fiscal austerity, and the adverse effects of foreign trade and technology adoption (Autor et al. (2017), Becker, Fetzer, and Novy (2017), Dippel, Gold, and Heblich (2016), Fetzer (2019), Moriconi, Peri, and Turati (2018)). 3 As Gyöngyösi and Verner (2022) show, the Hungarian example constitutes "pocketbook voting," that is, voters were effectively bribed by a party promising financial relief. ...
... More broadly, we contribute to the literature on the origins of populism and extreme movements. Several papers argue that trade shocks can increase support for more extreme candidates (Autor et al. (2017), Dippel, Gold, and Heblich (2016), Dal Bó et al. (2018)). Algan et al. (2017) find that the Great Recession undermined trust in national and European institutions. ...
Do financial crises radicalize voters? We study Germany's 1931 banking crisis, collecting new data on bank branches and firm‐bank connections. Exploiting cross‐sectional variation in precrisis exposure to the bank at the center of the crisis, we show that Nazi votes surged in locations more affected by its failure. Radicalization in response to the shock was exacerbated in cities with a history of anti‐Semitism. After the Nazis seized power, both pogroms and deportations were more frequent in places affected by the banking crisis. Our results suggest an important synergy between financial distress and cultural predispositions, with far‐reaching consequences.
... It should be noted that further research has identified that regions exposed to labour market shocks due to Chinese import competition have seen a rise in farright vote shares and anti-immigrant sentiments (Autor et al. 2017;Backes and Mueller 2024;Barone and Kreuter 2021;Cerrato et al. 2018;Colantone and Stanig 2018;Milner 2021). However, it is questionable whether these contributions examine the effects of deindustrialisation, as these processes have affected labour markets gradually over decades, long before the Chinese import shocks of the early 2000s (Acemoglu et al. 2016;Kollmeyer 2009;Rowthorn and Ramaswamy 1997). ...
The regional decline of manufacturing employment is frequently linked to the rise of right-wing populism in many Western countries. Surprisingly, contributions that directly examine the relationship between industrial decline and electoral support for these parties, as well as its underlying mechanisms, remain scarce. Moreover, it is often overlooked that regional industrial decline might also increase support for left-wing populism due to a greater demand for welfare compensation. Using novel historical data on regional manufacturing employment and geocoded survey data from Germany, we find that long-term actual industrial decline is associated with increased support for left-wing populism but not with support for right-wing populist parties. Rather, we find increased support for right-wing populism in places where manufacturing levels are historically high and industrial decline is looming. Empirical results on the underlying individual-level mechanisms are rather inconclusive. Although a greater automation risk is associated with a higher probability to vote for the AfD at the individual level, the regional effect of historic industrial employment on AfD support does not appear to be stronger among those exposed to automation. Further, the effect of regional industrial decline on support for Die Linke (The Left) is not driven by unemployed individuals, but rather by contextual effects, potentially reflecting sociotropic concerns. Our findings highlight the importance of developing a more nuanced understanding of how historical industrial employment and its decline have shaped support for right-wing and left-wing populist parties in distinct ways.
... We follow the literature, such as, Acemoglu et al. (2016), Autor et al. (2014), Autor et al. (2020a), Autor et al. (2020b), and construct our measure of Chinese import penetration ratio for each industry in India as follows: ...
How do output prices respond to trade shocks? Using detailed firm‐product level data on sales and quantity between 1996 and 2007, we study the causal effect of Chinese import competition on prices for Indian manufacturing firms. We find that Chinese import competition induces a significant decline in firm‐product prices. A 1 percentage point increase in the Chinese import penetration ratio reduces firm‐product prices by 3.5%. Further, this decline in prices is driven by a decline in markup, conditional on costs, as opposed to the pass through of cost savings to prices – providing evidence for pro‐competitive effect. This decline in prices and markup is less pronounced for firms owned by Business Groups compared to stand‐alone, privately owned firms. We also document a large decrease in marginal costs and an increase in markup with no significant effect on prices for firms on account of increased access to imported Chinese inputs.
... Similarly, workers who previously joined the middle class thanks to strong trade unions and lifetime industrial jobs are threatened by exposure to trade with China. In a path-breaking study, Autor et al. (2020) showed that electoral districts with greater exposure to Chinese imports were more likely to elect Republican members of Congress after 2010 and vote for Republican presidential candidates in the 2008-2016 period. Another highly influential paper by Colantone and Stanig (2018) analyzed the political impact of import exposure in 15 Western European regions from 1988 to 2007. ...
... Scheve and Slaughter (2004 ) find that workers experimentally exposed to inward or outward FDI reported increased job insecurity. Margalit (2011 ), Feigenbaum andHall (2015 ), Autor et al. (2020 ), and Che et al. (2016 ) find that politicians who advocate free trade receive fewer votes in constituencies with high manufacturing trade exposure, especially to Chinese imports. Jensen, Quinn, and Weymouth (2017 ) demonstrate a strong electoral effect from both the winners and losers of trade exposure. ...
We present two newdatabases we have constructed to explore the electoral consequences of structural economic policy reforms. One database measures reforms in domestic finance, external finance, trade, product, and labor markets covering 90 advanced and developing economies from 1973 to 2014. The other chronicles the timing and results of national elections. We find that liberalizing reforms are associated with economic benefits that accrue only gradually over time. Because of this delay, liberalizing reforms are costly to democratic incumbents when they are implemented close to elections. Electoral outcomes also depend on the state of the economy: reforms are penalized during contractions but are often rewarded in expansions.
... 4 See, for the labour market effects, among others, Autor et al. ( 2013 ) and Dauth et al. ( 2014 ). For political effects, see Colantone and Stanig ( 2018 ), Autor et al. ( 2020 ) and Dippel et al. ( 2022 ). For welfare analysis, see Caliendo et al. ...
This paper studies the economic and political effects of a large trade shock in agriculture—the grain invasion from the Americas—in Prussia during the first globalisation (1870-1913). We show that this shock led to a decline in the employment rate and overall income. However, we do not observe declining per capita income and political polarization, which we explain by a strong migration response. Our results suggest that the negative and persistent effects of trade shocks we see today are not a universal feature of globalisation, but depend on labour mobility. For our analysis, we digitize data from Prussian industrial and agricultural censuses on the county level and combine it with national trade data at the product level. We exploit the cross-regional variation in cultivated crops within Prussia and instrument with Italian and US trade data to isolate exogenous variation.
... Moreover, our results indicate that the trade war was politically consequential, precipitating a reduction in support for Republican congressional candidates in the 2018 midterm elections. Although various studies have found that US voters respond to the direct effects of trade on their local communities (e.g., Autor et al. 2020;Margalit 2011), it is widely argued that the broader voting public rarely holds politicians accountable for trade policies (Frieden 2022;Guisinger 2009). During highly publicized trade clashes, however, the salience of trade policy rises throughout the electorate and voters may punish the incumbent head of state and his or her party. ...
... These trends, in turn, have been associated with broader indicators of social or health-related inequality: higher levels of incarceration, poorer health outcomes and higher levels of mortality from drug use disorders(Dean and Kimmel, 2019;Nosrati et al., 2019). Indeed, the geographical pattern of job losses has also been associated with increasing levels of political partisanship and may partially explain the outcome of the 2016 presidential election(Autor et al., 2020).Content courtesy of Springer Nature, terms of use apply. Rights reserved. ...
Recent empirical work has offered strong support for ‘biased pluralism’ and ‘economic elite’ accounts of political power in the United States, according a central role to ‘business interest groups’ as a mechanism through which corporate influence is exerted. Here, we propose an additional channel of influence for corporate interests: the ‘policy-planning network,’ consisting of corporate-dominated foundations, think tanks, and elite policy-discussion groups. To evaluate this assertion, we consider one key policy-discussion group, the Council on Foreign Relations (CFR). We first briefly review the origins of this organization and then review earlier findings on its influence. We then code CFR policy preferences on 295 foreign policy issues during the 1981–2002 period. In logistic regression analyses, we find that the preferences of more affluent citizens and the CFR were positive, statistically significant predictors of foreign policy outcomes while business interest group preferences were not. These findings are discussed with a consideration of the patterns of CFR ‘successes’ and ‘failures’ for the issues in our dataset. Although a full demonstration of a causal connection between corporate interests, the policy-planning network and policy outcomes requires further research, we conclude that this has been shown to be a plausible mechanism through which corporate interests are represented and that ‘biased pluralism’ researchers should include it in their future investigations.
... Immigration(Barone et al., 2016) is measured as the ratio between immigrants and total population in 2001. Exposure to the China shock(Autor et al., 2020) is measured as ∑ where ΔM ITA k is the yearly average change in imports from China to Italy observed in sector k over the 2008-2013 period, L k is Italian employment in sector k in 2001, L ik is the employment in municipality i and sector k in 2001, and L i is the total employment in municipality i in 2001. Exposure to the euro shock is proxied by ∑ k Lik Li (1 − ϑ k )ΔREER, where ϑ k is the sectoral skill intensity in manufacturing sector k taken from Bugamelli et al. (2010) (lower sectoral skill content implies higher sensitivity to price competition); ΔREER is the annual change of the real effective exchange rate of the Italian currency in the 2008-2013 period, whose positive values indicate appreciation and, thus, loss of competitiveness. ...
Economic roots of populism in Western countries point to the role of economic insecurity that plagues losers from recent large economic shocks. We show that fiscal redistribution matters by comparing Italian municipalities equally hit by the economic shocks leading to populism but, at the same time, very differently exposed to the generosity of the EU structural funds, because of their locations on the two opposite sides of the geographical border that determines eligibility. Estimates resulting from a spatial regression discontinuity design show that in 2013 general election larger EU financing caused a drop in populism of about 9% of the mean of the dependent variable.
... A number of recent papers have analysed how domestic labour markets adjust to the changes in international trade associated with the integration of low-and middle-income countries into the global economy. In this section, we present a non-exhaustive review of studies that 2 The same empirical strategy has been used to study whether import competition increased voters' support for extreme populist parties in the US (Autor, Dorn, Hanson and Majlesi, 2016) and in Germany (Dippel et al., 2017). ...
... Specifically in relation to the impact that globalization had on Brexit, Colantone and Stanig (2018) find that the rise in Chinese imports directly increased the leave vote in those areas in which competition from China was greatest. Similarly, with regard to the United States (US), Autor et al. (2020) report that there was a growth in both strong-left and strong-right political views in electoral districts that were most exposed to import competition from China, whilst Rodrik (2021) examines the channels through which globalization can stimulate populism, focusing particularly on the impact of trade, financial globalization and immigration. Levi et al. (2021) analyse the role that two reforms introduced in New Zealand: the liberalization of trade, which negatively affected certain industries, and the development of a skilled migration system played in the increased support for the New Zealand first political party. ...
This paper focuses on the changing relationship between attitudes towards European Union (EU) membership and workers affected by globalization and technological advances in the lead‐up to the UK's EU referendum in 2016. It is found that workers employed in middling occupations, where both relative wages and employment have fallen, were significantly more likely than workers in high‐paying occupations to indicate that the UK's long‐term policy should be to leave the EU. This view was particularly noticeable amongst males with middling occupations in the post‐recessionary period between 2012 and 2015 and had increased significantly relative to the mainly pre‐recessionary period between 2004 and 2008.
How can against the background of multiple crises in the European Union (EU) and the war in Ukraine prosperity be secured for all, while mitigating not only distributional but also security and environmental concerns? What is the role of the state and what is the role of the market in these efforts? The book attempts to give answers to these questions with special focus on how these challenges play out for Poland and Germany. The contributions are the result of the latest Polish-German economic policy dialog held on October 12, 2023 at the SGH Warsaw School of Economics on the occasion of the 30th anniversary of the Polish-German Academic Forum at this university. The articles discuss different aspects of the current state of globalization and the impact on the Polish and German economy, Germany’s general economic situation and its role on global markets, the importance of political institutions for sustainable development and the prerequisites for the stability of democracies, the prospects of central bank digital currency in the EU as well as the aspirations towards more federalization in the EU from a Polish perspective. The volume provides readers interested in current economic policy issues in Germany and Poland in the context of the EU and the ongoing war in Ukraine with multifaceted perspectives and insights, and invites to deepen the knowledge and understanding of today’s economic challenges in both countries.
The global rise of right‐wing populist [RWP] parties presents a major political concern. RWP parties' voters tend to be citizens who have either experienced or fear economic deprivation. Income change constitutes a viable measure of this deprivation. However, previous contributions examining effects of income change on support for RWP parties have yielded diverging conclusions. This paper challenges previous findings by incorporating considerations of gender and within‐household inequality. We hypothesise a negative relationship between, on the one hand, personal and household income change and, on the other hand, sympathy towards RWP parties. Furthermore, we expect to find a stronger association between personal income change and RWP sympathy among men. Moreover, we expect the relationship between household income change and RWP sympathy to differ between genders. Finally, we hypothesise that this gender disparity can be interpreted by considering who contributes most to the household income. All these hypotheses are grounded in gender socialisation and economic dominance theories. Analysing Dutch LISS longitudinal data spanning from 2007 to 2021 (N = 7,801, n = 43,954) through fixed‐effects multilevel linear regression models enables us to address various competing explanations. It appears that only for men, personal income change is negatively linked with sympathies towards RWP parties. However, considering who is the highest earner within households reveals that women are also affected by their personal income change if they earn the highest income. For both men and women, household income change is negatively linked with sympathies towards RWP parties. These results lend partial support to both the socialisation and economic dominance theories. The implications of these findings are discussed.
This chapter summarizes the argument and the main findings of the book. There are two main questions that have been addressed. First, how did the integration of Latin America into the global economy shape the preferences of individuals and sectors within each country? With this question, trade preferences and their aggregation into organizations seeking to influence national (trade) politics are the dependent variable, or the outcome, to be explained. The answer to this question can help us answer the second question (which ultimately motivates this project), namely, under what circumstances do Latin American countries decide to reverse free trade policies? In this case, the question is about the political determinants of anti-globalization measures, and the success or failure of protectionist coalitions that aim to see their interests represented. The chapter finishes with the aftermath of the three cases examined and theoretical issues and avenues for further research.
This chapter presents a geography-based theory of trade policy that seeks to explain under what conditions free trade is more likely to be resisted in developing countries. The first part of the argument establishes the geographical impact that trade liberalization has had in Latin American countries, and that individuals are more likely to support free trade if they live in labor-intensive exporting regions and oppose it if they live in areas where trade has not had a positive impact. Second, the argument is that actors demanding protection are more likely to coalesce into social organizations when there is a concentration of experienced activists capable of rebuilding collective action using new vehicles to replace social organizations weakened by neoliberal reforms. This theory seeks to explain why each country has a different pattern of trade-related protests, which tend to be clustered in specific areas and absent in others. The third and final part argues that trade policy reversal is more likely when the bulk of the population lives in areas that saw little improvement or were negatively affected by trade liberalization, which makes the election of a leftist leader more likely. Nevertheless, the presence of organized pressure is necessary to ensure that the elected president follows through with the anti-trade mandate. This organized pressure is more likely to be effective when protectionist forces are located near the capital city.
This paper assesses the potential impacts of services trade liberalisation for a sample of African countries. The focus is on the relationship between labour productivity of manufacturing sectors and two types of services trade‐related policies – restrictions on foreign direct investment (FDI) in services and restrictions on international payments for invisibles. The analysis takes into account differences across manufacturing sectors in the intensity of use of different services as inputs into production as well as difference in the quality of economic governance across countries. We find that services trade liberalisation may have substantial positive impacts on the performance of manufacturing sectors, and increase with services input intensity and the quality of governance.
Response rates to important surveys used in social science research have been falling precipitously over the last few decades, raising questions about the representativeness of the resulting data and the quality of evidence that comes from it. We examine how partisan preferences influence response to the Current Population Survey (CPS). Using U.S. state and metro vote shares or an individual-level model based on the longitudinal structure of the CPS, we find evidence of a political cycle in refusals, but that partisanship does not explain the surge in refusals since 2009. Evidence from a natural experiment in Tea Party support using rain on the day of the first Tea Party rally indicates the anti-Census and anti-survey rhetoric of the Tea Party did not increase refusals.
The structure of the labor market has undergone important transformations in recent decades, especially due technological progress, through automation and the rise of new information and communication technologies. This has resulted in a polarization of the labor market, i.e. a recomposition in terms of occupations, notably with a decrease in so-called routine occupations located in the middle of the wage distribution, accompanied by a strong growth in so-called manual or abstract occupations, respectively located at the bottom and top of the wage distribution. These developments lead us to wonder about the consequences in terms of jobs and wages for workers. Has the polarization of labor had a negative impact on employment in Europe because of the presence of stronger labor market institutions and a higher minimum wage than in the United States? Has the polarization of the labor market had a heterogeneous impact depending on the level of qualification? Does the relative wage dynamics between education groups been affected ? The objective of my PhD thesis is to empirically answer these questions. The main contributions of this research project are the following. In Europe, labor market polarization has had a negative impact on employment and participation rates in high minimum wage countries, due to their inability to create enough manual jobs at the bottom of the wage distribution to offset the destruction of routine jobs. Moreover, in the United States, the polarization process and the reallocation of workers across occupations has negatively impacted the wages of low-skilled, but also to a similar extent medium-skilled workers, mainly due to a decrease in the average wage within occupations rather than due to a reallocation of workers to lower-paying occupations. Finally, middle-skilled workers have experienced a significant decline in their wage premium relative to the low-skilled since the early 2000s, due to the difficulties of young middle-skilled workers to hold abstracts when they enter the labor market, along a drastic decrease in their employment opportunities in routine occupations.
Le democrazie occidentali sono attraversate da una formidabile ondata anti-globalista. Questo volume offre un’interpretazione di questo fenomeno incentrata su due dinamiche strettamente connesse tra loro: l’indebolimento della leadership egemonica statunitense a fronte dell’ascesa politica ed economica di nuove potenze e la crescente domanda di protezione sociale proveniente da quelle fasce della popolazione che sono sempre più esposte al funzionamento di un’economia internazionale iper-globalizzata. Partendo da queste basi, il volume getta poi uno sguardo sul futuro. La sfida epocale con la quale siamo chiamati a confrontarci è quella di immaginare un futuro nel quale globalizzazione, sovranità e democrazia possano tornare a co-esistere virtuosamente. Senza una qualche forma di indirizzo e vincolo politico, difficilmente la globalizzazione potrà tornare ad essere compatibile con le esigenze dell’ordine e del consenso sociale.
We investigate how the salience of an ethnic minority affects the majority group’s voting behavior. We use the increased salience of Muslim communities during Ramadan as a natural experiment. Exploiting exogenous variation in the distance of election dates to Ramadan over the 1980–2013 period in Germany, our findings reveal an increased polarization. Vote shares for both right- and left-wing extremist parties increase in municipalities with mosques when an election takes place shortly after Ramadan. We use survey data to provide evidence on mechanisms: Ramadan increases respondents’ perceived share of the foreign-born population and emphasizes cultural dissimilarities, ultimately worsening attitudes toward Muslims. (JEL D72, D91, J15, Z12, Z13)
A large number of authoritarian regimes have reformed their central banks,
increasing legal independence. Yet, it is unclear whether economic institutions
– like independent central banks – can be effective in such regimes. We argue that
when central bank independence overlaps with the collective decision-making in
dominant-party regimes – one particular type of authoritarian ruling regime –
dictators have diminished control over the central bank. Thus the central bank
becomes effective enough to restrict expansionary fiscal policy, reducing the
mobilization of supporters through patronage and increasing authoritarian
breakdown risk. Analyses detailed in Bodea et al. (2019)4 using data from 1970
to 2012 in 94 authoritarian regimes find that high central bank independence in
dominant-party regimes increases the likelihood of authoritarian breakdown.
Moreover, independent central banks in dominant-party regimes contribute to
lower fiscal expenditures. Our work shows that promoting central bank reforms
in authoritarian regimes may lead to the expected economic effects, but the political
effect of such institutions can be unexpected.
The paper builds on the classical understanding of the interplay between material processes and political conflicts, but generalises it in several key respects. This approach does not assume relevant political-economic aggregations ex ante (such as industries or ‘classes’); rather, it explores different possible ways of aggregating social groups and defining their interests depending on the situation under investigation. Moreover, interdependencies in the economy impose the need to keep conflicts within boundaries that are compatible with the viability of the system. Because sectors and groups can be aggregated in different ways, dynamics also depends on how actors represent the system and their position therein, and hence what they understand their interest to be. Different representations give rise to different definitions of competing interests and viability requirements, which in turn generates different endogenous dynamics of the political-economic system. The approach is illustrated through the examples of the Eurozone crisis and Covid-19 crisis.
This is the first empirical study to investigate the effects of trade-exposure experiences on people’s beliefs in hard work (BHW). Using a more flexible experience function than that used in previous studies, I find that both earlier and recent experiences have strong effects on BHW. BHW is strengthened by experiences of export exposure and weakened by those of import exposure in low- and middle-income countries. By contrast, import-exposure experiences positively affect BHW in high-income countries. In the US, however, import exposure, particularly from low-income countries, tends to weaken BHW, consistent with the ‘China trade shock’ literature.
In recent decades, there has been a gradual decline in working-class organisations, including social democratic parties and trade unions, and an increase in support for populist radical right parties across western democracies. These trends have a plausible common cause: an increase in labour market insecurity associated with deindustrialisation may cause disenchantment with establishment organisations and support for politicians who criticise them. In this article, I examine how individual labour market status interacts with labour market policies to affect attitudes towards trade unions and populist radical right parties. I find that individuals with insecure employment status become less likely to support trade unions and more likely to support populist radical right parties as employment protection for secure workers increases. This effect is offset somewhat by spending on active labour market policies. I find evidence for these predictions in data for 27 Organisation for Economic Co-Operation and Development countries from 1995 to 2009.
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