American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Local Economic and Political Effects of Trade Deals: Evidence from NAFTA
American Economic Review
vol. 114,
no. 6, June 2024
(pp. 1540–75)
Abstract
Why have white, less-educated voters left the Democratic Party? We highlight the role of the 1994 North American Free Trade Agreement (NAFTA). In event-study analysis, we demonstrate that counties whose 1990 employment depended on industries vulnerable to NAFTA suffered large and persistent employment losses after its implementation. Voters in these counties (and protectionist voters regardless of geography) turned away from the party of President Clinton, who promoted the agreement. This shift is larger for whites (especially men and those without a college degree) and social conservatives, suggesting that racial identity and social-issue positions mediate reactions to economic policies.Citation
Choi, Jiwon, Ilyana Kuziemko, Ebonya Washington, and Gavin Wright. 2024. "Local Economic and Political Effects of Trade Deals: Evidence from NAFTA." American Economic Review, 114 (6): 1540–75. DOI: 10.1257/aer.20220425Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- F15 Economic Integration
- F16 Trade and Labor Market Interactions
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination