Labor Market Concentration and the Political Effects of Trade Shocks

• In Event: Knowledge and Legitimacy in Trade Politics

Abstract

This paper seeks to understand the political effects of trade shocks in a context of high local labor market concentration. The shift to the right observed following the China Shock is shown to be greatest in locales with the highest level of labor market concentration. Where workers exercise countervailing market power through unionization this relationship is attenuated. By linking the large literature on backlash to globalization with novel data on labor market concentration this paper furthers our understanding of trade shocks' conditional effects and emphasizes the central role of market power.

Author

• Sean Nossek, Yale University