Does Emigration from Post-industrial Communities Moderate Populist Backlashes?

• In Event: Is Global Capitalism Good for Democracy?

Abstract

A classical argument in economics holds that emigration from declining communities facilitates economic recovery. To explore political implications, I incorporate internal migration dynamics into an economic geography theory of trade politics. I argue that electoral backlashes from local trade shocks can persist for decades where historically low emigration creates persistent unemployment. I test this using the plausibly exogenous NAFTA trade shock and explore heterogeneous responses by long-run mobility. This uses a new dataset on internal migration from the Internal Revenue Service. I show that NAFTA exposure in the 1990s significantly increased Donald Trump's 2012-2016 change in local vote shares. However, this two-decade-long effect of NAFTA only materialized within regions that lacked a significant emigration response. In contrast, places that eventually recovered by shedding excess unemployment experienced no such backlash. These results are consistent with an analysis that shows a moderating impact of emigration on local wages and unemployment following NAFTA. Given declining mobility rates in the United States, these results suggest a growing political importance of the local economy in globalization politics.

Author

• Thomas Michael Flaherty, Texas A&M University