The Effect of Trade on Workers and Voters. Issue 641 (12th May 2021)

• Record Type: Journal Article
• Authors: Dippel, Christian; Gold, Robert; Heblich, Stephan; Pinto, Rodrigo
• Is Part Of: Economic journal. Volume 132:Issue 641(2022)
• Page Start: 199
• Page End: 217
• Publication Date: 2021-05-12
• Subjects: Economics -- Periodicals; Économie politique -- Périodiques; 330.05
• DOI: 10.1093/ej/ueab041
• Languages: English
• ISSNs: 0013-0133

Abstract

Abstract: We investigate economic causes of the rising support of populist parties in industrialised countries. Looking at Germany, we find that exposure to imports from low-wage countries increases the support for nationalist parties between 1987–2009, while increasing exports have the opposite effect. The net effect translates into increasing support of the right-populist Alternative for Germany party after its emergence in 2013. Individual data from the German Socio-Economic Panel reveal that low-skilled manufacturing workers' political preferences are most responsive to trade exposure. Using a novel approach to causal mediation analysis, we identify trade-induced labour market adjustments as an economic mechanism causing the voting response to international trade.