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IZA Discussion Paper No. 13026
March 2020
Globalization, Government Popularity, and the Great Skill Divide

revised version published in: Journal of Politics, 2024, 86 (4), 1177 - 1191

How does international trade affect the popularity of governments and leaders? The recent backlash against globalization renders this question extremely topical. Yet, most previous work has looked for political effects of aggregate trade flows without decomposing into particular types of products. We provide the first large-scale, global evidence that trade shocks affect political approval and show that what matters is the match between workers' skills and the characteristics of goods traded. Using a unique data set including 118 countries, we show that growth in high skill intensive exports increases approval of incumbents among skilled individuals. Growth in high skill intensive imports has the opposite effect. High skill intensive trade has no discernible effect on the unskilled. To identify exogenous variation, we exploit the time-varying effects of air and sea distances on bilateral trade flows. Our findings help explain responses to trade of economic elites in developing and middle income countries.

Kommunikation
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
Netzwerkkoordination
Christina Gathmann
christina.gathmann@liser.lu

Das IZA@LISER-Netzwerk ist eine weltweite Gemeinschaft für exzellente Forschung in der Arbeitsmarktökonomie und angrenzenden Fachgebieten. Nach dem Wechsel von Bonn wird das Netzwerk nun am Luxembourg Institute of Socio-Economic Research (LISER) koordiniert.

Über das IZA@LISER Network
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