TY  - JOUR
AU  - Hanson,Gordon H.
AU  - Scheve,Kenneth F.
AU  - Slaughter,Matthew
TI  - Public Finance and Individual Preferences over Globalization Strategies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11028
PY  - 2005
Y2  - January 2005
UR  - http://www.nber.org/papers/w11028
L1  - http://www.nber.org/papers/w11028.pdf
N1  - Author contact info:
Gordon H. Hanson
IR/PS 0519
University of California, San Diego
9500 Gilman Drive
La Jolla, CA  92093-0519
Tel: 858/822-5087
Fax: 858/534-3939
E-Mail: gohanson@ucsd.edu

Matthew J. Slaughter
Tuck School of Business
Dartmouth College
100 Tuck Hall
Hanover, NH 03755
Tel: 603/646-2939
Fax: 603/646-0995
E-Mail: matthew.j.slaughter@dartmouth.edu
AB  - In the absence of distortionary tax and spending policies, freer immigration and trade for a country would often be supported by similar groups thanks to similar impacts on labor income. But government policies that redistribute income may alter the distributional politics. In particular, immigrants may pay taxes and receive public services. Imports, obviously, can do neither of these. This suggests quite different political coalitions may organize around trade and immigration. In this paper we develop a framework for examining how pre-tax and post-tax cleavages may differ across globalization strategies and also fiscal jurisdictions. We then apply this framework to the case of individual immigration and trade preferences across U.S. states. We have two main findings. First, high exposure to immigrant fiscal pressures reduces support for freer immigration among natives, especially the more-skilled. Second, there is no public-finance variation in opinion over trade policy, consistent with the data that U.S. trade policy has negligible fiscal-policy impacts. Public-finance concerns appear to be crucial in shaping opinions towards alternative globalization strategies.
ER  -