Kiel Institute for the World Economy
Information about this author at RePEc
NBER Working Papers and Publications
|March 2017||Instrumental Variables and Causal Mechanisms: Unpacking The Effect of Trade on Workers and Voters|
with Christian Dippel, Stephan Heblich, Rodrigo Pinto: w23209
We investigate the impact of import exposure on regional labor markets and voting behavior. Using a standard IV model, we find in German data from 1987–2009 that import exposure caused both significant labor market adjustments and increasing support for extreme-right parties. Our focus is on the question that naturally follows: to what extent was the effect of import exposure on labor markets responsible for the political response? The standard IV model cannot answer this question. We propose a new framework for mediation analysis in IV settings that can, while making minimal additional assumptions on the causal relations between the unobserved variables. We find that the effect of import exposure on voting that is mediated by labor market adjustments is larger than the total effect of imp...
|December 2015||Globalization and Its (Dis-)Content: Trade Shocks and Voting Behavior|
with Christian Dippel, Stephan Heblich: w21812
We identify the causal effect of trade-integration with China and Eastern Europe on voting in Germany from 1987 to 2009. Looking at the entire political spectrum, we find that only extreme-right parties respond significantly to trade integration. Their vote share increases with import competition and decreases with export access opportunities. We unpack mechanisms using reduced form evidence and a causal mediation analysis. Two-thirds of the total effect of trade integration on voting appears to be driven by observable labor market adjustments, primarily changes in manufacturing employment. These results are mirrored in an individual-level analysis in the German Socioeconomic Panel.