IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

An Empirical Analysis of Trade-Related Redistribution and the Political Viability of Free Trade

Listed author(s):
  • Lake, James

    ()

    (Southern Methodist University)

  • Millimet, Daniel L.

    ()

    (Southern Methodist University)

Even if free trade creates net welfare gains for a country as a whole, the associated distributional implications can undermine the political viability of free trade. We show that trade-related redistribution increases the political viability of free trade in the US. We do so by assessing the causal effect of expected redistribution associated with the US Trade Adjustment Assistance program on US Congressional voting behavior on eleven Free Trade Agreements (FTAs) between 2003 and 2011. We find that a one standard deviation increase in redistribution leads to more than a 3% point increase in the probability of voting in favor of an FTA for the median representative. In addition, a one standard deviation decrease in redistribution across the entire US would have precluded passage of two of the eleven FTAs in our sample.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://ftp.iza.org/dp8086.pdf
Download Restriction: no

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 8086.

as
in new window

Length: 55 pages
Date of creation: Mar 2014
Publication status: published in: Journal of International Economics, 2016, 99, 156-178
Handle: RePEc:iza:izadps:dp8086
Contact details of provider: Postal:
IZA, P.O. Box 7240, D-53072 Bonn, Germany

Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information: Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:


References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Paola Conconi & Giovanni Facchini & Maurizio Zanardi, 2012. "Fast-Track Authority and International Trade Negotiations," American Economic Journal: Economic Policy, American Economic Association, vol. 4(3), pages 146-189, August.
  2. Krueger, Alan B. & Mueller, Andreas I., 2008. "Job Search and Unemployment Insurance: New Evidence from Time Use Data," IZA Discussion Papers 3667, Institute for the Study of Labor (IZA).
  3. Furusawa, Taiji & Lai, Edwin L. -C., 1999. "Adjustment costs and gradual trade liberalization," Journal of International Economics, Elsevier, vol. 49(2), pages 333-361, December.
  4. Jeffrey M. Wooldridge, 2001. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262232197, September.
  5. Blonigen, Bruce A & Figlio, David N, 1998. "Voting for Protection: Does Direct Foreign Investment Influence Legislator Behavior?," American Economic Review, American Economic Association, vol. 88(4), pages 1002-1014, September.
  6. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
  7. Kenneth F. Scheve & Matthew J. Slaughter, 2001. "Globalization and the Perceptions of American Workers," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 109, 03.
  8. Erhan Artuc & Shubham Chaudhuri & John McLaren, 2007. "Trade Shocks and Labor Adjustment: A Structural Empirical Approach," NBER Working Papers 13465, National Bureau of Economic Research, Inc.
  9. Tripathi, Micky & Ansolabehere, Stephen & Snyder, James M., 2002. "Are PAC Contributions and Lobbying Linked? New Evidence from the 1995 Lobby Disclosure Act," Business and Politics, Cambridge University Press, vol. 4(02), pages 131-155, August.
  10. Carl Davidson & Steven Matusz, 2005. "Trade and Turnover: Theory and Evidence," International Trade 0503009, EconWPA.
  11. Gruber, Jonathan, 1997. "The Consumption Smoothing Benefits of Unemployment Insurance," American Economic Review, American Economic Association, vol. 87(1), pages 192-205, March.
  12. Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, vol. 54(1), pages 75-96, June.
  13. Magee, Christopher, 2001. "Administered protection for workers: an analysis of the trade adjustment assistance program," Journal of International Economics, Elsevier, vol. 53(1), pages 105-125, February.
  14. Feenstra, Robert C. & Lewis, Tracy R., 1994. "Trade adjustment assistance and Pareto gains from trade," Journal of International Economics, Elsevier, vol. 36(3-4), pages 201-222, May.
  15. repec:mpr:mprres:7736 is not listed on IDEAS
  16. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
  17. Proudman, J. & Redding, S., 1998. "Evolving Patterns of International Trade," Economics Papers 144, Economics Group, Nuffield College, University of Oxford.
  18. Ozer-Balli, Hatice & Sørensen, Bent E, 2010. "Interaction Effects in Econometrics," CEPR Discussion Papers 7929, C.E.P.R. Discussion Papers.
  19. James A. Brander & Barbara J. Spencer, 1989. "Trade Adjustment Assistance: Welfare and Incentive Effects of Payments to Displaced Workers," NBER Working Papers 3071, National Bureau of Economic Research, Inc.
  20. repec:mpr:mprres:7737 is not listed on IDEAS
  21. Tripathi Micky & Ansolabehere Stephen & Jr James M. Snyder, 2002. "Are PAC Contributions and Lobbying Linked? New Evidence from the 1995 Lobby Disclosure Act," Business and Politics, De Gruyter, vol. 4(2), pages 1-26, August.
  22. Lorenzo Caliendo & Fernando Parro, 2012. "Estimates of the Trade and Welfare Effects of NAFTA," NBER Working Papers 18508, National Bureau of Economic Research, Inc.
  23. Chappell, Henry W, Jr, 1982. "Campaign Contributions and Congressional Voting: A Simultaneous Probit-Tobit Model," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 77-83, February.
  24. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 162, Princeton, Woodrow Wilson School - Public and International Affairs.
  25. repec:mpr:mprres:7735 is not listed on IDEAS
  26. James Lake, 2015. "Revisiting the link between PAC contributions and lobbying expenditures," Departmental Working Papers 1504, Southern Methodist University, Department of Economics.
  27. Conconi, Paola & Facchini, Giovanni & Steinhardt, Max & Zanardi, Maurizio, 2012. "The political economy of trade and migration: Evidence from the U.S. Congress," CEPR Discussion Papers 9270, C.E.P.R. Discussion Papers.
  28. Im Hyejoon & Sung Hankyoung, 2011. "Empirical Analyses of U.S. Congressional Voting on Recent FTA," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-37, December.
  29. Paola Conconi & Giovanni Facchini & Max F. Steinhardt & Maurizio Zanardi, 2012. "The Political Economy of Trade and Migration: Evidence from the US Congress: CEPR Discussion Paper 9270," Working Papers ECARES ECARES 2012-49, ULB -- Universite Libre de Bruxelles.
  30. John Romalis, 2007. "NAFTA's and CUSFTA's Impact on International Trade," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 416-435, August.
  31. Carl Davidson & Steven Matusz, 2005. "Trade Liberalization and Compensation," International Trade 0503008, EconWPA.
  32. Bombardini, Matilde & Trebbi, Francesco, 2012. "Competition and political organization: Together or alone in lobbying for trade policy?," Journal of International Economics, Elsevier, vol. 87(1), pages 18-26.
  33. Daniel L. Smith & Jeffrey B. Wenger, 2013. "State Unemployment Insurance Trust Solvency and Benefit Generosity," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 32(3), pages 536-553, 06.
  34. Lori G. Kletzer, 2004. "Trade-related Job Loss and Wage Insurance: a Synthetic Review," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 724-748, November.
  35. Dixit, Avinash & Norman, Victor, 1986. "Gains from trade without lump-sum compensation," Journal of International Economics, Elsevier, vol. 21(1-2), pages 111-122, August.
  36. Franses, Ph.H.B.F. & Cramer, J.S., 2002. "On the number of categories in an ordered regression model," Econometric Institute Research Papers EI 2002-15, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
  37. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
  38. Davidson, Carl & Matusz, Steven J. & Nelson, Douglas R., 2007. "Can compensation save free trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 167-186, March.
  39. Giovanni Facchini & Maurizio Zanardi, 2014. "Policymakers' Horizon and Trade Reforms: the Protectionist Effect of Elections," ULB Institutional Repository 2013/191190, ULB -- Universite Libre de Bruxelles.
  40. Peter Z. Schochet & Ronald D'Amico & Jillian Berk & Sarah Dolfin & Nathan Wozny, 2012. "Estimated Impacts for Participants in the Trade Adjustment Assistance TAA Program Under the 2002 Amendments," Mathematica Policy Research Reports 582d8723f6884d4eb7a3f95a4, Mathematica Policy Research.
  41. Robert E. Baldwin & Christopher S. Magee, 1998. "Is Trade Policy for Sale? Congressional Voting on Recent Trade Bills," NBER Working Papers 6376, National Bureau of Economic Research, Inc.
  42. Rodrik, Dani, 1996. "Why do More Open Economies Have Bigger Governments?," CEPR Discussion Papers 1388, C.E.P.R. Discussion Papers.
  43. Lori G. Kletzer, 1998. "Job Displacement," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 115-136, Winter.
  44. repec:mpr:mprres:6988 is not listed on IDEAS
  45. Jooyoun Park, 2012. "Does Occupational Training by the Trade Adjustment Assistance Program Really Help Reemployment? Success Measured as Occupation Matching," Review of International Economics, Wiley Blackwell, vol. 20(5), pages 999-1016, November.
  46. Hyejoon Im & Hankyoung Sun, 2008. "Empirical Analyses of U.S. Congressional Voting on Recent FTA Bills," Governance Working Papers 22992, East Asian Bureau of Economic Research.
  47. C. Michael Aho & Thomas O. Bayard, 1984. "Costs and Benefits of Trade Adjustment Assistance," NBER Chapters, in: The Structure and Evolution of Recent U.S. Trade Policy, pages 153-194 National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp8086. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.