Do Labor Issues Matter in the Determination of U.S. Trade Policy? An Empirical Reevaluation
American Economic Review
vol. 96,
no. 1, March 2006
(pp. 405-421)
Abstract
Some recent empirical studies, motivated by Grossman and Helpman's (1994) "protection-for-sale" model, suggest that very few factors (none of them labor related) determine trade protection. This paper reexamines the roles that labor issues play in the determination of trade policy. We introduce collective bargaining, differences in inter industry labor mobility, and trade union lobbying into the protection-for-sale model, and show that the equilibrium protection rate in our model depends upon these labor market variables. We test our model predictions using data from U.S. manufacturing and find that labor market considerations do seem to matter for U.S. trade policy.Citation
Matschke, Xenia, and Shane M. Sherlund. 2006. "Do Labor Issues Matter in the Determination of U.S. Trade Policy? An Empirical Reevaluation." American Economic Review, 96 (1): 405-421. DOI: 10.1257/000282806776157524Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- F13 Trade Policy; International Trade Organizations
- F16 Trade and Labor Market Interactions