Identifying the Determinants of Pro- and Anti-trade Sentiment

When examining the labor market consequences of international trade, we repeatedly find effects that are so minor that they appear unlikely justification for the degree to which anti-trade sentiment is observed in US public opinion polls. Given the lack of a pronounced negative influence of trade on either wages or employment, in chapter 9 we considered the Smooth Adjustment Hypothesis as an explanation for the weak trade-related labor market effects. We reported evidence that labor market adjustment costs, in the form of employment change, are lower for industries characterized by increasing intra-industry trade and, in particular, increasing vertical intra-industry trade. In chapter 10 , we examined the effectiveness of public policies that are designed to assist trade-displaced workers. Such policies may also serve to reduce opposition to trade, and more effective polices may engender increased support for international trade. Finally, in chapter 11 , we offered loss aversion and imperfect information as plausible explanations for the low support for trade among members of the US public and for the differences that we see between the level of support for trade demonstrated by US residents and the populations of most other countries.