Skip to main content
×
×
Home

Occupation and the Political Economy of Trade: Job Routineness, Offshorability, and Protectionist Sentiment

  • Erica Owen and Noel P. Johnston
Abstract

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.

Copyright
References
Hide All
Acemoglu, Daron, and Autor, David. 2011. Skills, Tasks and Technologies: Implications for Employment and Earnings. In Handbook of Labor Economics,Vol. 4B, edited by Ashenfelter, Orley and Card, David, 1043–171. San Diego, CA: Elsevier.
Autor, David. 2013. The “Task Approach” to Labor Markets: An Overview. Journal for Labour Market Research 46 (3):185–99.
Autor, David, Levy, Frank, and Murnane, Richard. 2003. The Skill Content of Recent Technological Change: An Empirical Explanation. Quarterly Journal of Economics 118 (4):1279–333.
Baker, Andrew. 2005. Who Wants to Globalize? Consumer Tastes and Labor Markets in a Theory of Trade Policy Beliefs. American Journal of Political Science 49 (4):924–38.
Baldwin, Robert. 2006. Globalisation: The Great Unbundling(s). Paper prepared for the Globalisation Challenges for Europe and Finland project, Economic Council of Finland.
Baldwin, Robert, and Robert-Nicoud, Frédéric. 2014. Trade-in-Goods and Trade-in-Tasks: An Integrating Framework. Journal of International Economics 92 (1):5162.
Beaulieu, Eugene, Benarroch, Michael, and Gaisford, James D.. 2011. Intra-Industry Trade Liberalization: Why Skilled Workers Are More Likely to Support Free Trade. Review of International Economics 19 (3):579–94.
Bhagwati, Jagdish. 2009. Don't Cry for Free Trade. In Offshoring of American Jobs: What Response from US Economic Policy? edited by Friedman, Benjamin, 118. Cambridge, MA: MIT Press.
Blinder, Alan. 2006. Offshoring: The Next Industrial Revolution? Foreign Affairs 85 (2):113–38.
Blinder, Alan. 2007. How Many US Jobs Might Be Offshorable? Working Paper 142. Princeton, NJ: Center for Economic Policy Studies, Princeton University.
Blinder, Alan. 2009. Offshoring: Big Deal, or Business as Usual? In Offshoring of American Jobs: What Response from US Economic Policy? edited by Friedman, Benjamin, 1959. Cambridge, MA: MIT Press.
Blinder, Alan, and Krueger, Alan. 2013. Alternative Measures of Offshorability: A Survey Approach. Journal of Labor Economics 31 (2):S97128.
Blonigen, Bruce. 2008. New Evidence on the Formation of Trade Policy Preferences. Working Paper 14627. Cambridge, MA: National Bureau of Economic Research.
Blonigen, Bruce, and McGrew, Jacob. 2014. Task Routineness and Trade Policy Preferences. Economics and Politics 26 (3):505–18.
Brambor, Thomas, Clark, William, and Golder, Matt. 2006. Understanding Interaction Models: Improving Empirical Analyses. Political Analysis 14 (1):6382.
Busch, Marc, and Reinhardt, Eric. 2000. Geography, International Trade, and Political Mobilization in US Industries. American Journal of Political Science 44 (4):703–19.
Chase, Kerry. 2008. Moving Hollywood Abroad: Divided Labor Markets and the New Politics of Trade in Services. International Organization 62 (4):653–87.
Council of Economic Advisors. Economic Report of the President. 2004. Washington, DC: US Government Printing Office.
Crinò, Rosario. 2010. Service Offshoring and White-Collar Employment. Review of Economic Studies 77 (2):595632.
Davis, Donald, and Harrigan, James. 2011. Good Jobs, Bad Jobs, and Trade Liberalization. Journal of International Economics 84 (1):2636.
Ebenstein, Avraham, Harrison, Ann, McMillan, Margaret, and Phillips, Shannon. 2014. Estimating the Impact of Trade and Offshoring on American Workers Using the Current Population Surveys. Review of Economics and Statistics 96 (4):581–95.
Egger, Hartmut, and Kreickemeier, Udo. 2009. Firm Heterogeneity and the Labor Market Effects of Trade Liberalization. International Economic Review 50 (1):187216.
Ehrlich, Sean, and Maestas, Cherie. 2010. Risk Orientation, Risk Exposure, and Policy Opinions: The Case of Free Trade. Political Psychology 31 (5):657–84.
Feenstra, Robert, and Hanson, Gordon. 1996. Foreign Investment, Outsourcing, and Relative Wages. In The Political Economy of Trade Policy: Papers in Honor of Jagdish Bhagwati, edited by Feenstra, Robert, Grossman, Gene, and Irwin, Douglas, 89127. Cambridge, MA: MIT Press.
Fordham, Benjamin, and Kleinberg, Katja. 2012. How Can Economic Interests Influence Support for Free Trade? International Organization 66 (2):311–28.
Garner, Alan. 2004. Offshoring in the Service Sector: Economic Impact and Policy Issues. Economic Review 89 (3):537.
Goos, Maarten, Manning, Alan, and Salomons, Anna. 2014. Explaining Job Polarization: Routine-Biased Technological Change and Offshoring. American Economic Review 104 (8):2509–26.
Grossman, Gene, and Rossi-Hansberg, Esteban. 2006. The Rise of Offshoring: It's Not Wine for Cloth Anymore. In the proceedings of The New Economic Geography: Effects and Policy Implications symposium, 59–102. Kansas City, MO: Federal Reserve Bank of Kansas.
Grossman, Gene, and Rossi-Hansberg, Esteban. 2008. Trading Tasks: A Simple Theory of Offshoring. American Economic Review 98 (5):1978–97.
Guisinger, Alexandra. 2017. American Opinion on Trade: Preferences without Politics. New York: Oxford University Press.
Hainmueller, Jens, and Hiscox, Michael. 2006. Learning to Love Globalization: Education and Individual Attitudes Toward International Trade. International Organization 60 (2):469–98.
Hays, Jude. 2009. Globalization and the New Politics of Embedded Liberalism. New York: Oxford University Press.
Hays, Jude, Ehrlich, Sean, and Peinhardt, Clint. 2005. Government Spending and Public Support for Trade in the OECD: An Empirical Test of the Embedded Liberalism Thesis. International Organization 59 (2):473–94.
Helpman, Elhanan, Itskhoki, Oleg, and Redding, Stephen. 2010. Inequality and Unemployment in a Global Economy. Econometrica 78 (4):1239–83.
Hiscox, Michael. 2002. International Trade and Political Conflict: Commerce, Coalitions, and Mobility. Princeton, NJ: Princeton University Press.
Hummels, David, Jørgensen, Rasmus, Munch, Jakob, and Xiang, Chong. 2014. The Wage Effects of Offshoring: Evidence from Danish Matched Worker-Firm Data. American Economic Review 104 (6):1597–629.
Jensen, J. Bradford. 2011. Global Trade in Services: Fear, Facts, and Offshoring. Washington, DC: Peterson Institute for International Economics.
Jensen, J. Bradford, and Kletzer, Lori. 2005. Tradable Services: Understanding the Scope and Impact of Services Offshoring. In Brookings Trade Forum: 2005, edited by Brainard, Lael and Collins, Susan M., 73133. Washington, DC: Brookings Institution Press.
Kambourov, Gueorgui, and Manovskii, Iourii. 2008. Rising Occupation and Industry Mobility in the United States: 1968–97. International Economic Review 49 (1):4179.
Kuo, Jason, and Naoi, Megumi. 2015. Individual Attitudes. In The Oxford Handbook of the Political Economy of International Trade, edited by Martin, Lisa, 99118. New York: Oxford University Press.
Lake, David. 2009. Open Economy Politics: A Critical Review. Review of International Organizations 4 (3):219–44.
Mankiw, N. Gregory, and Swagel, Phillip. 2006. The Politics and Economics of Offshore Outsourcing. Journal of Monetary Economics 53 (5):1027–56.
Mansfield, Edward, and Mutz, Diana. 2009. Support for Free Trade: Self-Interest, Sociotropic Politics, and Out-Group Anxiety. International Organization 63 (3):425–57.
Mansfield, Edward, and Mutz, Diana. 2013. US vs. Them: Mass Attitudes Toward Offshore Outsourcing. World Politics 65 (4):571608.
Mansfield, Edward, Mutz, Diana, and Silver, Laura. 2015. Men, Women, Trade, and Free Markets. International Studies Quarterly 59 (2):303–15.
Margalit, Yotam. 2011. Costly Jobs: Trade-related Layoffs, Government Compensation, and Voting in US Elections. American Political Science Review 105 (1):166–88.
Margalit, Yotam. 2012. Lost in Globalization: International Economic Integration and the Sources of Popular Discontent. International Studies Quarterly 56 (3):484500.
Markusen, James. 2005. Modeling the Offshoring of White-collar Services: From Comparative Advantage to the New Theories of Trade and FDI. Working Paper 11827. Cambridge, MA: National Bureau of Economic Research.
Markusen, James. 2013. Expansion of Trade at the Extensive Margin: A General Gains-From-Trade Result and Illustrative Examples. Journal of International Economics 89 (1):262–70.
Mayda, Anna-Maria, and Rodrik, Dani. 2005. Why Are Some People (and Countries) More Protectionist Than Others? European Economic Review 49 (6):1393–430.
Mayer, Wolfgang. 1974. Short-Run and Long-Run Equilibrium for a Small Open Economy. Journal of Political Economy 82 (5):955–67.
Milner, Helen, and Mukherjee, Bumba. 2013. Democracy, Globalization, and the Skill Bias in Trade Protection in Developing Countries. Paper presented at the 109th Annual Meeting of the American Political Science Association, August, Chicago.
Mussa, Michael. 1974. Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run. Journal of Political Economy 82 (6):1191–203.
Naoi, Megumi, and Kume, Ikuo. 2011. Explaining Mass Support for Agricultural Protectionism: Evidence from a Survey Experiment During the Global Recession. International Organization 65 (4):771–95.
Oldenski, Lindsay. 2014. Offshoring and the Polarization of the US Labor Market. Industrial and Labor Relations Review 67 (3):734–61.
Owen, Erica. 2017. Exposure to Offshoring and the Politics of Trade Liberalization: Debates and Votes on Free Trade Agreements in the US House of Representatives, 2001–2006. International Studies Quarterly. Online 3 August at <https://doi.org/10.1093/isq/sqx020>.
Owen, Erica, and Walter, Stefanie. 2017. Open Economy Politics and Brexit: Insights, Puzzles, and Ways Forward. Review of International Political Economy 24 (2):179202.
Rehm, Philipp. 2009. Risks and Redistribution: An Individual-Level Analysis. Comparative Political Studies 42 (7):855–81.
Rho, Sungmin, and Tomz, Michael. 2017. Why Don't Trade Preferences Reflect Economic Self-Interest? International Organization 71 (S1):S85S108.
Rogowski, Ronald. 1989. Commerce and Coalitions: How Trade Affects Domestic Political Alignments. Princeton, NJ: Princeton University Press.
Rommel, Tobias, and Walter, Stefanie. 2017. The Electoral Consequences of Offshoring: How the Globalization of Production Shapes Party Preferences. Comparative Political Studies. First view, 15 June. doi:10.1177/0010414017710264.
Scheve, Kenneth, and Slaughter, Matthew. 2001. What Determines Individual Trade-Policy Preferences? Journal of International Economics 54 (2):267–92.
Walter, Stefanie. 2010. Globalization and the Welfare State: Testing the Microfoundations of the Compensation Hypothesis. International Studies Quarterly 54 (2):403–26.
Walter, Stefanie. 2017. Globalization and the Demand-Side of Politics: How Globalization Shapes Labor Market Risk Perceptions and Policy Preferences. Political Science Research and Methods 5 (1):5580.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

International Organization
  • ISSN: 0020-8183
  • EISSN: 1531-5088
  • URL: /core/journals/international-organization
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×
Type Description Title
UNKNOWN
Supplementary materials

Owen and Johnston supplementary material
Owen and Johnston supplementary material 2

 Unknown (3.2 MB)
3.2 MB
PDF
Supplementary materials

Owen and Johnston supplementary material
Owen and Johnston supplementary material 1

 PDF (427 KB)
427 KB

Metrics

Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed