Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96695
Authors: 
Lake, James
Millimet, Daniel L.
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Paper 8086
Abstract: 
Even if free trade creates net welfare gains for a country as a whole, the associated distributional implications can undermine the political viability of free trade. We show that trade-related redistribution increases the political viability of free trade in the US. We do so by assessing the causal effect of expected redistribution associated with the US Trade Adjustment Assistance program on US Congressional voting behavior on eleven Free Trade Agreements (FTAs) between 2003 and 2011. We find that a one standard deviation increase in redistribution leads to more than a 3% point increase in the probability of voting in favor of an FTA for the median representative. In addition, a one standard deviation decrease in redistribution across the entire US would have precluded passage of two of the eleven FTAs in our sample.
Subjects: 
free trade agreements
trade adjustment assistance
political economy
redistribution
JEL: 
F13
H50
J65
Document Type: 
Working Paper

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