Kiel Institute for the World Economy
Institutional Affiliation: 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 , , : w23209
Instrumental variables (IV) are a common means to identify treatment effects. But standard IV methods do not allow us to unpack the complex treatment effects that arise when a treatment and its outcome together cause a second outcome of interest. For example, IV methods have been used to show that import exposure to low-wage countries has adversely affected Western labor markets. Similarly, they have been used to show that import exposure has increased voter polarization. However, standard IV cannot estimate to what extent the latter is a consequence of the former. This paper proposes a new identification framework that allows us to do so, appealing to one additional identifying assumption without requiring additional instruments. The added identifying assumption can be relaxed, and bounds...
|December 2015||Globalization and Its (Dis-)Content: Trade Shocks and Voting Behavior|
with , : 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.