occupation and the political economy of trade job routineness offshorability and protectionist sentiment the recent backlash against globalization in many advanced economies raises questions about the source of this protectionist sentiment traditional accounts generally attribute the welfare consequences of trade to skill level or industry characteristics or instead emphasize the nonmaterial determinants of support for openness consequently we know little about how a major labor market characteristic occupation shapes both the distributional consequences of and preferences toward trade openness we propose and test a new theory of trade policy preferences based on occupation characteristics drawing from the tasks literature in economics we argue that occupation characteristics are a key determinant of how trade affects workers and thus individuals trade preferences our theory suggests that in advanced economies individuals in routine task intensive occupations will be negatively affected by trade and thus more protectionist this relationship will increase in the degree to which occupation job tasks can be provided from a distance i e offshorable we find support for our theory using data from the 2003 and 2013 international social survey programme in high income democracies our results suggest that the occupational characteristics of routineness and offshorability are important determinants of trade preferences offering additional understanding of the sources of protectionist sentiment even after controlling for labor market characteristics suggested by conventional wisdom

budget constrained frontier measures of fiscal equality and efficiency in schooling equality and efficiency are key issues in educational reform here the authors analyze the efficiency and equality consequences of various school finance reforms using a cost indirect output distance function this function readily models multiple output production under conditions of budgetary constraint and provides a natural measure of performance that is closely related to farrell type measures of efficiency the analysis suggests that despite school district inefficiency finance reforms can affect student achievement however any potential gains in output from redistribution are dwarfed by the potential gains from increased efficiency more strikingly the analysis demonstrates that budgetary reforms designed to equalize expenditures could actually increase the inequality of student achievement

who wants to globalize consumer tastes and labor markets in a theory of trade policy beliefs although the allure of consumption is the engine of globalization political economists have tended to ignore varying consumer tastes as a potential source of beliefs about trade policy this article develops a theory of trade policy preferences that adds the notion of varying consumer tastes to the standard labor market application of the heckscher ohlin trade model the theory which can explain trade preferences both across individuals and countries is supported by an empirical analysis of survey data from 41 nations heavy consumers of exportables are found to be more protectionist than heavy consumers of imports and import competing goods moreover citizens in countries with expensive tradable goods see trade liberalization as a remedy to the rents they pay for protectionism other findings also support the more conventional labor market side of the heckscher ohlin model

learning to love globalization education and individual attitudes toward international trade recent studies of public attitudes toward trade have converged on one central finding support for trade restrictions is highest among respondents with the lowest levels of education this has been interpreted as strong support for the stolper samuelson theorem the classic economic treatment of the income effects of trade that predicts that trade openness benefits those owning factors of production with which their economy is relatively well endowed those with skills in the advanced economies while hurting others low skilled workers we reexamine the available survey data showing that the impact of education on attitudes toward trade is almost identical among respondents in the active labor force and those who are not even those who are retired we also find that while individuals with college level educations are far more likely to favor trade openness than others other types of education have no significant effects on attitudes and some actually reduce the support for trade even though they clearly contribute to skill acquisition combined these results strongly suggest that the effects of education on individual trade preferences are not primarily a product of distributional concerns linked to job skills we suggest that exposure to economic ideas and information among college educated individuals plays a key role in shaping attitudes toward trade and globalization this is not to say that distributional issues are not important in shaping attitudes toward trade just that they are not clearly manifest in the simple broad association between education levels and support for free trade the authors would like to thank james alt jeffry frieden robert lawrence dani rodrik ron rogowski ken scheve andy baker peter gourevitch and beth simmons for helpful comments on earlier drafts

how teachers unions affect education production this study helps to explain why measured school inputs appear to have little effect on student outcomes particularly for cohorts educated since 1960 teachers unionization can explain how public schools simultaneously can have more generous inputs and worse student performance using panel data on united states school districts i identify the effect of teachers unionization through differences in the timing of collective bargaining especially timing determined by the passage of state laws that facilitate teachers unionization i find that teachers unions increase school inputs but reduce productivity sufficiently to have a negative overall effect on student performance union effects are magnified where schools have market power

teachers unions and wages in the 1970s unionism now pays this paper provides evidence that confirms the results of previous studies that teacher unionism produced relatively small wage gains during the early 1970s but it also shows that union gains increased substantially in the late 1970s the evidence is based on an application of two complementary research designs cross section wage level regressions and cross section wage change regressions to national samples of teacher data for 1974 75 and 1977 78 the authors conclude that the union nonunion wage differential among teachers reached 12 to 22 percent by the late 1970s and during the period 1974 78 the real wages of unionized teachers increased while those of nonunionized teachers declined they offer several possible explanations for these trends

through a glass and darkly attitudes toward international trade and the curious effects of issue framing are most voters opposed to globalization a growing body of empiri cal research using data from available surveys of public opinion suggests that anti globalization sentiments are strong especially among blue collar workers this article reports the findings from a survey experiment aimed at measuring the impact of issue framing on individuals stated attitudes toward international trade respondents given an antitrade introduction to the survey question linking trade to the possibility of job losses were 17 percent less likely to favor increasing trade with other countries than were those asked the same question without any introduction at all curiously respondents who were given a protrade introduction to the question suggesting that trade can lead to lower prices for consumers were not more likely to express sup port for trade than those who received no introduction in addition the responses of less educated individuals were more sensitive to framing effects than those of highly educated individuals without measuring and taking these types of framing effects into account opinion surveys offer unreliable guides to gauging the extent and dis tribution of opposition to trade among voters results from a second experiment reveal that knowledge of the endorsement of trade openness by economists mitigates framing effects and raises overall support for trade liberalization by a substantial degree

sudden stops and phoenix miracles in emerging markets a decade has passed since the salvos from mexico s tequila crisis of 1994 1995 echoed around the financial world since then many more crises have taken place in emerging market economies ems furthermore crises have tended to bunch together bringing to the forefront the systemic nature of these events true every new crisis has its own idiosyncratic features but useful policy lessons must be derived from robust empirical regularities this is the research strategy we have pursued in the last few years we will report on two types of regularities that strike us as highly robust across em crises a sudden stops of capital inflows and b phoenix miracles a sudden stop is a sharp fall in capital inflows relative to their past trajectory sudden stops are not a common feature in developed economies and display a large degree of temporal bunching suggesting that global capital market turmoil acts as a coordinating factor external to ems as shown in section i however balance sheet effects namely the interaction of large changes in the real exchange rate during sudden stops and liability dollarization i e foreign exchange denominated debts are key in influencing the likelihood of a sudden stop thus even though the initial shock is in principle exogenous to the economy whether or not it materializes into a sudden stop depends on domestic financial vulnerabilities on the other hand a phoenix miracle is defined as a case in which output recovers relatively quickly from a sharp collapse with virtually no recovery in credit or capital inflows and a very weak recovery in investment hence the reference to the mythical bird rising from the ashes the existence of phoenix like recoveries suggests that financial frictions play a key role in pushing economies to the abyss from which in some way or another they can crawl back to safe ground by means less than apparent to the conventional observer looking for standard fundamentals and thus may appear miraculous interestingly the great depression of the 1930s shares some of the key features of phoenix miracles in ems but shows salient differences as well that suggest nominal labor market rigidities are not crucial in explaining output collapse in ems understanding these regularities could and we believe does shed light on policies aimed at preventing crises and attenuating their effects

the effect of teachers unions on education production evidence from union election certifications in three midwestern states using a unique data set on teachers union election certifications from iowa indiana and minnesota i estimate the effect of teachers unions on school district resources and on student educational attainment my empirical strategy allows for nonparametric leads and lags of union age i find no impact on teacher pay or per student district expenditures but that unions increase teacher employment by 5 i find no class size effect because of enrollment increases in unionized districts and i estimate that unions have no net effect on high school dropout rates these findings highlight the importance of correctly measuring unionization status

what determines individual trade policy preferences abstract this article provides new evidence on the determinants of individual trade policy preferences using individual level survey data for the united states there are two main empirical results first we find that factor type dominates industry of employment in explaining support for trade barriers second we find that home ownership also matters for individuals trade policy preferences independent of factor type home ownership in counties with a manufacturing mix concentrated in comparative disadvantage industries is correlated with support for trade barriers this finding suggests that in addition to current factor incomes driving preferences as in standard trade models preferences also depend on asset values

bargaining laws as a cause and consequence of the growth of teacher unionism this study analyzes state level data for 1959 78 to determine whether the rapid growth of teacher unionism during those years was primarily a result or a cause of the public sector bargaining laws adopted during the same period the author finds contrary to the view of some scholars that the enactment of laws requiring public sector employers to bargain with majority representatives of their employees was the single most important cause of the growth in the proportion of teachers covered by union contracts although the growth in teacher unionism in turn encouraged the adoption of some new or stronger bargaining laws this effect was relatively weak more important predictors of new bargaining laws included the extent of political patronage in a state and the bargaining laws adopted by neighboring states

explaining mass support for agricultural protectionism evidence from a survey experiment during the global recession why are citizens in advanced industrialized countries willing to accept high prices for agricultural products conventional wisdom suggests that agricul tural interests secure government protection because producers are concentrated and better politically organized than diffused consumers due to its focus on pro ducer capacity for collective action however the literature fails to account for the high levels of mass support for agricultural protectionism in advanced industrial ized nations this article presents new evidence from a survey experiment in japan conducted during the recent global recession december 2008 that accounts for this puzzle using randomly assigned visual stimuli the experiment activates respon dents identification with either producer or consumer interests and proceeds to ask attitudinal questions regarding food imports the results suggest that consumer priming has no reductive or additive effects on the respondents support for liberal izing food imports surprisingly producer priming increases respondents opposi tion to food import particularly among those who fear future job insecurity we further disentangle the puzzling finding that consumers think like producers on the issue of food import along two mechanisms sympathy for farmers and projec tion of their own job insecurity the results lend strong support to the projection hypothesis

geography international trade and political mobilization in u s industries posed industries geographic concentration strongly increases a the formation of common trade policy preferences among workers b employees contributions to political campaigns and c voter turnout this activism traces not to the behavior of political elites but rather to the increased possibility for collective action that spatial proximity affords individuals in trade exposed industries es eography is everywhere in vogue from studies of silicon valley effects and industrial agglomeration audretsch 1998 dyer 1994 to the pricing practices of monopolies from corporate alliances to regional economic development porter 1998 the spatial proximity of firms is shedding new light on some of the most enduring puzzles in business and economics yet despite this interest in industrial clusters few studies have asked and fewer still have empirically assessed how spatial proximity conditions an industry s political behavior this link is particularly important for sectors exposed to international trade given the longstanding debate over how geographic concentration affects an industry s ability to secure import relief recent studies busch and reinhardt 1999 mcgiliivray 1997 find that spatially proximate industries are indeed more successful in gaining protection although the mechanisms by which they exert greater political influence remain little understood we seek to explain how geographic concentration facilitates political mobilization on the part of trade exposed industries geographic concentration bolsters an industry s capacity for collective action in particular as a wide variety of literatures insists spatial proximity facilitates greater face to face communication aids in the diffusion of specialized political knowledge provides the basis for denser social networks and enables more effective monitoring and sanctioning of those who might free ride on the political contributions of others in short individuals in geographically concentrated groups are more likely to recognize and act upon their collective interests yet spatial proximity alone is not sufficient to motivate political mobilization underlying common interests must exist as well looking at manufacturing industries we hypothesize

the cost disease and government growth qualifications to baumol changes in real world wage movements across sectors account for about a third of the rise in the cost of u s government services between 1959 and 1989 while relatively slower productivity in the public sector accounts for the remaining two thirds even though it is slower however the productivity record still is positive even in the labor intensive government sector consequently baumol argues that the public s likely future objection to necessary increases in the share of expenditures over the next 50 years will betray a fiscal illusion unless policymakers take pains to dissolve it but slower productivity may be equally due to the structural organization removing public monopolies reducing bureaucracies and undertaking privatization in education for example are other policy options that could radically change the productivity record meanwhile in his recent calculations of dramatic government expenditure increases expected in the next half century baumol omits reference to the marginal welfare cost of public funds which on our estimates will increase at least ten times to reach 1 71 by the year 2040

risks and redistribution an individual level analysis much of the disagreement in the debate about globalization and its present or absent effects on the welfare state stems from competing assumptions about the individual level determinants of redistributional preferences this article calls for and provides testing of these causal mechanisms at the individual level traditional accounts suggest that risks at the industry level are important determinants of redistributional preferences this article argues that risks at the occupational level should also be considered a comprehensive new data set is used to test whether and what types of risks in the labor market play an important role in shaping preferences statistical analyses of public opinion surveys european social survey show strong evidence for the assumed causal mechanism contrary to much of the literature but in line with this article s claims it is the occupational rather than the industry level that is most important the article lays out implications of these findings

unionization and cost of production compensation productivity and factor use effects unionization affects cost of production through compensation premia technology shifts and deviations from the least cost combination of inputs the first two are familiar but the last is not this article distinguishes the three effects illustrates the factor use effect and suggests that it may resolve several apparent inconsistencies union induced cost effects appear larger than those implied by union compensation and productivity differentials union compensation and productivity differentials suggest a larger effect on labor intensity of output than is observed and employers complain that union work rules reduce productivity when there is little evidence that this is so

macro factors and the affine term structure of interest rates this paper formulates an affine term structure model of bond yields from a dynamic stochastic general equilibrium model with observable macro state variables as the term structure factors model implications for the joint macro term structure dynamics are consistent with the empirical patterns from the var estimation model calibration and simulation exercises also provide clear macroeconomic interpretations of the latent term structure factors as found in the finance literature most of the slope factor movement can be explained by exogenous monetary policy shocks and the level factor movement is closely related to the technology shocks

trade in goods and trade in tasks an integrating framework abstract we introduce a simple but flexible analytical framework in which both trade in goods and trade in tasks arise we use this framework to provide versions of the gains from trade and the famous four ho theorems heckscher ohlin factor price equalisation stolper samuelson and rybczynski that apply to this environment we extend our framework to accommodate monopolistic competition and two way offshoring and to integrate theoretical results of the early offshoring literature

government spending and public support for trade in the oecd an empirical test of the embedded liberalism thesis according to the embedded liberalism thesis governments committed to free trade provide insurance and other transfers to compensate those who lose economically from expanded trade the goal of this spending is to maintain public support for trade liberalization we provide a micro level test of the critical assumption behind the embedded liberalism thesis that government programs designed to protect individuals harmed by imports reduce opposition to free trade our micro results have important implications for the macro relationship between trade and government spending which we also test we find empirical support for the embedded liberalism thesis in both our micro and macro level analyses earlier versions of this article were presented at the midwest political science association s 2002 meeting and at the university of illinois during summer 2003 we thank the respective panel and seminar participants for their feedback in addition we want to acknowledge valuable comments from william bernhard rebecca blank kerwin charles alan deardorff john dinardo john freeman brian gaines jim granato nathan jensen william keech layna mosley robert pahre ken scheve marina whitman two anonymous reviewers and lisa martin they of course are not responsible for any errors

the war between the rent seekers in conclusion it seems some states have experienced spending growth to the point where economic and political constraints on that growth have led to a situation where rent seekers can gain only at the expense of other rent seekers as that fact becomes recognized peaceful cooperative political action between rent seeking groups that prevailed when such action resulted in a larger expenditure rent pool might give way to war between the rent seekers if state and local spending continues its relative growth we would expect the war between rent seekers to spread to other jurisdictions

the politics and economics of offshore outsourcing abstract this paper reviews the political uproar over offshore outsourcing connected with the release of the economic report of the president erp in february 2004 examines the differing ways in which economists and non economists talk about offshore outsourcing and assesses the empirical evidence on the importance of offshore outsourcing in accounting for the weak labor market from 2001 to 2004 even with important gaps in the data the empirical literature is able to conclude that offshore outsourcing is unlikely to have accounted for a meaningful part of the job losses in the recent downturn or contributed much to the slow labor market rebound the empirical evidence to date while still tentative actually suggests that increased employment in the overseas affiliates of us multinationals is associated with more employment in the us parent rather than less

emerging market local currency bond yields and foreign holdings a fortune or misfortune the paper shows that foreign holdings of local currency government bonds in emerging market countries ems have reduced bond yields but have somewhat increased yield volatility econometric analyses conducted from a sample of 13 ems demonstrate that these results are robust and causal we use an identification strategy exploiting the geography based measure of ems financial remoteness vis a vis major offshore financial centers as an instrumental variable for the foreign holdings variable the results also show that in countries with weak fiscal positions foreign holdings are greatly associated with increased yield level a case study using poland data elaborates on the cross country findings

union effects on teacher productivity this paper examines the effect of collective bargaining on several factors known to be determinants of student achievement in the public schools particularly its effect on the teacher s allocation of time among various activities estimates based on a national survey show that bargaining appears to reduce time spent in instruction to increase the level of education of teachers and to increase the number of administrators all differences associated with lower student achievement on the other hand bargaining tends to increase the time teachers spend in class preparation the experience level of teachers and the teacher student ratio differences associated with higher student achievement the net effect of collective bargaining on teacher productivity is therefore not clear at this time

occupational mobility and wage inequality in this article we argue that wage inequality and occupational mobility are intimately related we are motivated by our empirical findings that human capital is occupation specific and that the fraction of workers switching occupations in the u s was as high as 16 a year in the early 1970 s and had increased to 21 by the mid 1990 s we develop a general equilibrium model with occupation specific human capital and heterogeneous experience levels within occupations we find that the model calibrated to match the level of occupational mobility in the 1970 s accounts quite well for the level of within group wage inequality in that period next we find that the model calibrated to match the increase in occupational mobility accounts for over 90 of the increase in wage inequality between the 1970 s and the 1990 s the theory is also quantitatively consistent with the level and increase in the short term variability of earnings copyright wiley blackwell

us versus them mass attitudes toward offshore outsourcing economists have argued that outsourcing is another form of international trade however based on a representative national survey of americans conducted in 2007 and 2009 the distribution of preferences on these two issues appears to be quite different this article examines the origins of attitudes toward outsourcing focusing on the extent to which it reflects 1 the economic vulnerabilities of individuals 2 the information they receive about outsourcing including their subjective understanding of what constitutes outsourcing and 3 noneconomic attitudes toward foreign people and foreign countries the findings emphasize the importance of variations in understandings of the term as well as the highly symbolic nature of attitudes toward this issue individuals who believe the us should distance itself from international affairs more generally who are nationalistic or who feel that members of other ethnic and racial groups within the us are less praiseworthy than their own group tend to have particularly hostile reactions to outsourcing the informational cues people receive are also important influences on their understanding of and attitudes toward outsourcing experimental results further emphasize the symbolic nature of attitudes toward outsourcing taken together the results strongly suggest that attitudes are shaped less by the economic consequences of outsourcing than by a sense of us versus them

on the contract curve a test of alternative models of collective bargaining the traditional model of collective bargaining confines unions to settlements constrained by the employer s labor demand curve but an alternative model places wage employment outcomes on a contract curve that extends beyond the labor demand curve this paper derives a multidimensional hedonic contract curve model in which employment security provisions are used to maintain efficient bargains outside the employer s demand curve and distinguishes empirically between the contract curve and demand constraint models using data for public school teachers in new york state estimates clearly support the contract curve model over the demand constraint model by linking the gap between compensation and the value of the marginal product to the strength of employment security provisions

state collective bargaining laws and public sector pay using the public use microdata sample from the 2005 to 2015 american community survey the authors provide new evidence on how state collective bargaining laws affect public sector wages to isolat

teacher unions and the cost of public education do teacher unions affect the cost of public education based upon data from two national surveys and holding measures of educational output and other factors constant the authors of this paper find that teacher unions raise costs by 7 to 15 percent the estimated differential is not reduced by treating unionization as endogenous by distinguishing between large and small districts or by distinguishing between districts in large and small cities the union effect on cost works through teacher compensation production technology and factor use and is borne primarily by taxpayers with little or no effect on average student achievement

international financial remoteness and macroeconomic volatility abstract this paper shows that proximity to major international financial centers seems to reduce business cycle volatility in particular we show that countries that are farther from major locations of international financial activity systematically experience more volatile growth rates in both output and consumption even after accounting for political institutions trade and other controls our results are relatively robust in the sense that more financially remote countries are more volatile though the results are not always statistically significant the comparative strength of this finding is in contrast to the more ambiguous evidence found in the literature

why are some people and countries more protectionist than others we analyze two cross country data sets that contain information on attitudes toward trade as well as a broad range of socio demographic and other indicators we nd that pro trade preferences are signi cantly and robustly correlated with an individual s level of human capital in the manner predicted by the factor endowments model preferences over trade are also correlated with the trade exposure of the sector in which an individual is employed individuals in non traded sectors tend to be the most pro trade while individuals in sectors with a revealed comparative disadvantage are the most protectionist third an individual s relative economic status has a very strong positive association withpro trade attitudes finally non economic determinants in the form of values identities and attachments play an important role in explaining the variation in preferences over trade high degrees of neighborhood attachment and nationalism patriotism are associated withprotectionist tendencies c

support for free trade self interest sociotropic politics and out group anxiety although it is widely acknowledged that an understanding of mass attitudes about trade is crucial to the political economy of foreign commerce only a handful of studies have addressed this topic these studies have focused largely on testing two models both of which emphasize that trade preferences are shaped by how trade affects an individual s income the factor endowments or heckscher ohlin model posits that these preferences are affected primarily by a person s skills the specific factors or ricardo viner model posits that trade preferences depend on the industry in which a person works we find little support for either of these models using two representative national surveys of americans the only potential exception involves the effects of education initial tests indicate that educational attainment and support for open trade are directly related which is often interpreted as support for the heckscher ohlin model however further analysis reveals that education s effects are less representative of skill than of individuals anxieties about involvement with out groups in their own country and beyond furthermore we find strong evidence that trade attitudes are guided less by material self interest than by perceptions of how the u s economy as a whole is affected by trade

rising occupational and industry mobility in the united states 1968 97 we document and analyze the high level and the substantial increase in worker mobility in the united states over the 1968 97 period at various levels of occupational and industry aggregation this is important in light of the recent findings that human capital of workers is largely occupation or industry specific to control for measurement error in occupation and industry coding we develop a method that utilizes the psid retrospective occupation industry supplemental data files we emphasize the importance of our findings for understanding a number of issues such as the changes in wage inequality aggregate productivity job stability and life cycle earnings profiles

how can economic interests influence support for free trade recent research on the sources of individual attitudes toward trade policy comes to very different conclusions about the role of economic self interest the skeptical view suggests that long standing symbolic predispositions and sociotropic perceptions shape trade policy opinions more than one s own material well being we believe this conclusion is premature for two reasons first the practice of using one attitude to predict another raises questions about direction of causation that cannot be answered with the data at hand this problem is most obvious when questions about the expected impact of trade are used to predict opinions about trade policy second the understanding of self interest employed in most studies of trade policy attitudes is unrealistically narrow in reality the close relationship between individual economic interests and the interests of the groups in which individuals are embedded creates indirect pathways through which one s position in the economy can shape individual trade policy preferences we use the data employed by mansfield and mutz to support our argument that a more complete account of trade attitude formation is needed and that in such an account economic interests may yet play an important role 1