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Globalization, Government Popularity, and the Great Skill Divide

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  • Cevat G. Aksoy
  • Sergei Guriev
  • Daniel S. Treisman

Abstract

How does international trade affect the popularity of governments and leaders? We provide the first large-scale, systematic evidence that the divide between skilled and unskilled workers worldwide is producing corresponding differences in the response of political preferences to trade shocks. Using a unique data set including 118 countries and nearly 450,000 individuals, we find that growth in high skill intensive exports (of goods and services) increases approval of the leader and incumbent government among skilled individuals. Growth in high skill intensive imports has the opposite effect. High skill intensive trade has no such effect among the unskilled. To identify exogenous variation in international trade, we exploit the time-varying effects of air and sea distances on bilateral trade flows. Our findings suggest that the political effects of international trade differ with skill intensity and that skilled individuals respond differently from their unskilled counterparts to trade shocks.

Suggested Citation

  • Cevat G. Aksoy & Sergei Guriev & Daniel S. Treisman, 2018. "Globalization, Government Popularity, and the Great Skill Divide," NBER Working Papers 25062, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25062
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    Cited by:

    1. Aksoy, Cevat & Eichengreen, Barry & Saka, Orkun, 2020. "The Political Scar of Epidemics," CEPR Discussion Papers 14879, C.E.P.R. Discussion Papers.
    2. Thiemo Fetzer, 2018. "Did Austerity Cause Brexit?," CESifo Working Paper Series 7159, CESifo.
    3. Fetzer, Thiemo, 2018. "Did Austerity Cause Brexit?," CAGE Online Working Paper Series 381, Competitive Advantage in the Global Economy (CAGE).

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    More about this item

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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