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What Determines Individual Trade Policy Preferences?

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  • Kenneth F. Scheve
  • Matthew J. Slaughter

Abstract

This paper provides new evidence on the determinants of individual trade policy preferences using an individual-level data set identifying both stated trade policy preferences and potential trade exposure through several channels for the United States in 1992. There are two main empirical results. First, we find that factor type dominates industry of employment in explaining support for trade barriers. This result is consistent with a Heckscher-Ohlin model of the United States in which the country is well endowed with skilled labor relative to the rest of the world. The result suggests that there is high intersectoral labor mobility in the United States over the time horizons relevant to individuals when evaluating trade policy. Second, we find that home ownership also matters for individuals' trade policy preferences. Independent of factor type, home ownership in counties with a manufacturing mix concentrated in comparative disadvantage industries is strongly correlated with support for trade barriers. This finding suggests that in addition to current factor incomes driving preferences as in standard trade models, in reality preferences also depend on asset values. To the extent that trade policy is like other government policies which affect citizens by changing relative product prices, our findings have implications for how individuals form preferences over a wide range of economic policies.

Suggested Citation

  • Kenneth F. Scheve & Matthew J. Slaughter, 1998. "What Determines Individual Trade Policy Preferences?," NBER Working Papers 6531, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:6531
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    Cited by:

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    2. Kenneth F. Scheve & Matthew J. Slaughter, 1999. "Labor-Market Competition and Individual Preferences Over Immigration Policy," NBER Working Papers 6946, National Bureau of Economic Research, Inc.
    3. Mayda, Anna Maria & Rodrik, Dani, 2005. "Why are some people (and countries) more protectionist than others?," European Economic Review, Elsevier, vol. 49(6), pages 1393-1430, August.
    4. Calmfors, Lars & Dimdins, Girts & Sendén, Marie Gustafsson & Montgomery, Henry & Stavlöt, Ulrika, 2013. "Why do people dislike low-wage trade competition with posted workers in the service sector?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 82-93.
    5. Pushan Dutt & Devashish Mitra, 2016. "Endogenous trade policy through majority voting: an empirical investigation," World Scientific Book Chapters, in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 4, pages 67-93, World Scientific Publishing Co. Pte. Ltd..
    6. Lars Calmfors & Girts Dimdins & Marie Gustafsson Sendén & Henry Montgomery & Ulrika Stavlöt, 2012. "Why Do People Dislike Low-Wage Trade Competition with Posted Workers in the Service Sector?," CESifo Working Paper Series 3842, CESifo.
    7. José Anson & Olivier Cadot, 2004. "Par-delà le "Röstigraben": l'électorat suisse partagé face à l'UE," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 140(II), pages 171-206, June.
    8. Jose Tavares, 2003. "Trade, factor proportions and political rights," Nova SBE Working Paper Series wp437, Universidade Nova de Lisboa, Nova School of Business and Economics.
    9. Magee, Christopher S.P. & Davidson, Carl & Matusz, Steven J., 2005. "Trade, turnover, and tithing," Journal of International Economics, Elsevier, vol. 66(1), pages 157-176, May.

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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