Monday 06 June 2022 16:00 - 17:30

This event is both online and in person

SAL 3.05, 3rd Floor Conference Room, Sir Arthur Lewis Building, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH

About this event

We exploit a natural experiment to study the extent to which popular attitudes toward trade are driven by economic fundamentals. In 2007, Costa Rica put a free trade agreement (FTA) to a national referendum. With a single question on the ballot, 59% of Costa Rican adult citizens cast a vote on whether they wanted an FTA with the United States to be ratified, or not. We merge disaggregated referendum results with employer-employee data, customs and balance-sheet data, firm-to-firm transactions data, and data on household composition and expenditures. We document that a firm’s exposure to the FTA, directly and via input-output linkages, significantly influences the voting behavior of its employees. This effect is greater for voters who are aligned with pro-FTA political candidates. We find that import competition plays a role in explaining votes against openness, and that within-industry heterogeneity is key in explaining votes, as compared with sector-level exposure. We also show that citizens considered the expected decrease in consumer prices when exercising their vote.

Participants are expected to adhere to the CEP Events Code of Conduct.

Directions

This event will take place in SAL 3.05, 3rd Floor Conference Room, Sir Arthur Lewis Building, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH.

This series is part of the CEP's Labour Markets programme.