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

Abstract

AbstractThe 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.