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The Effect of Trade on Workers and Voters

Author

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  • Christian Dippel
  • Robert Gold
  • Stephan Heblich
  • Rodrigo Pinto

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.

Suggested Citation

  • Christian Dippel & Robert Gold & Stephan Heblich & Rodrigo Pinto, 2022. "The Effect of Trade on Workers and Voters," The Economic Journal, Royal Economic Society, vol. 132(641), pages 199-217.
    • Handle: RePEc:oup:econjl:v:132:y:2022:i:641:p:199-217.
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    File URL: http://hdl.handle.net/10.1093/ej/ueab041
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    Citations

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    Cited by:

    1. Chung, Kee H. & Chuwonganant, Chairat, 2023. "COVID-19 pandemic and the stock market: Liquidity, price efficiency, and trading," Journal of Financial Markets, Elsevier, vol. 64(C).
    2. Carl Leonard Fischer & Lorenz Meister, 2023. "Economic Determinants of Populism," DIW Roundup: Politik im Fokus 145, DIW Berlin, German Institute for Economic Research.
    3. Matthieu Crozet & Julian Hinz, 2023. "Blowback: The Effect of Sanctions on Democratic Elections," Working Papers hal-04150484, HAL.
    4. Nils Braakmann & Wessel N. Vermeulen, 2023. "Do mass layoffs affect voting behaviour? Evidence from the UK," British Journal of Industrial Relations, London School of Economics, vol. 61(4), pages 922-950, December.
    5. Barth, Erling & Finseraas, Henning & Kjelsrud, Anders & Moene, Kalle, 2023. "Openness and the welfare state: risk and income effects in protection without protectionism," European Journal of Political Economy, Elsevier, vol. 79(C).
    6. Benczes, István & Szabó, Krisztina, 2023. "Társadalmi törésvonalak és gazdasági (ir)racionalitások. A közgazdaságtan szerepe és helye a populizmus kutatásában [Social cleavages and economic (ir)rationalities: The role of economics in populi," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 23-54.
    7. Mona Foertsch & Felix Roesel, 2023. "Sports Clubs and Populism: Quasi-Experimental Evidence from German Cities," CESifo Working Paper Series 10259, CESifo.
    8. Lee, Albert J. & Chung, Kee H., 2022. "Hidden liquidity, market quality, and order submission strategies," Journal of Financial Markets, Elsevier, vol. 61(C).
    9. Crozet, Matthieu & Hinz, Julian, 2023. "Blowback: The effect of sanctions on democratic elections," Kiel Working Papers 2246, Kiel Institute for the World Economy (IfW Kiel).
    10. Kee H. Chung & Chairat Chuwonganant, 2023. "Tick size and price efficiency: Further evidence from the Tick Size Pilot Program," Financial Management, Financial Management Association International, vol. 52(3), pages 483-511, September.
    11. Maria Greve & Michael Fritsch & Michael Wyrwich, 2023. "Long‐term decline of regions and the rise of populism: The case of Germany," Journal of Regional Science, Wiley Blackwell, vol. 63(2), pages 409-445, March.
    12. Natkhov, Timur & Pyle, William, 2023. "Revealed in transition: The political effect of planning's legacy," European Economic Review, Elsevier, vol. 159(C).
    13. Niklas Potrafke & Felix Roesel, 2022. "Online Versus Offline: Which Networks Spur Protests?," CESifo Working Paper Series 9969, CESifo.
    14. Liu, Chen & Ma, Xiao, 2023. "Migration, tariffs, and China's export surge," Journal of International Economics, Elsevier, vol. 140(C).
    15. Kukić, Leonard, 2023. "The last Yugoslavs: Ethnic diversity and national identity," Explorations in Economic History, Elsevier, vol. 88(C).
    16. Kukic, Leonard & Arslantas, Yasin, 2022. "Religious change and persistence in Bosnia: Poverty, conversions, and nationalism, 1468-2013," IFCS - Working Papers in Economic History.WH 35286, Universidad Carlos III de Madrid. Instituto Figuerola.
    17. Eugenio Levi & Isabelle Sin & Steven Stillman, 2024. "The lasting impact of external shocks on political opinions and populist voting," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 349-374, January.

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