Peter K. Schott Publications

We propose a method for identifying exposure to changes in trade policy based on asset prices that has several advantages over standard measures: it encompasses all avenues of exposure, it is natively firm-level, it yields estimates for both goods and service producers, and it can be used to study reductions in difficult-to-quantify non-tariff-barriers in a way that controls naturally for broader macroeconomic shocks. Applying our method to two well-studied US trade liberalizations provides new insight into service-sector responses and reveals dramatically different outcomes among small versus large firms, even within narrow industries.

We examine election voting and legislators’ roll-call votes in the United States over a twenty-five year period. Voters in areas more exposed to trade liberalization with China in 2000 subsequently shift their support toward Democrats, relative to the 1990s, though this boost for Democrats wanes after the rise of the Tea Party in 2010. House members’ votes in Congress rationalize these trends, with Democratic representatives disproportionately supporting protection during the early 2000s. Together, these results imply that voters in areas subject to higher import competition shifted votes toward the party more likely to restrict trade.

We investigate the impact of a large and persistent economic shock on "deaths of despair." We find that areas more exposed to a plausibly exogenous change in international trade policy exhibit relative increases in fatal drug overdoses, specifically among whites. We show that these results are not driven by pre-existing trends in mortality rates, that the estimated relationships are robust to controls for state-level legislation pertaining to opioid availability and health care, and that the impact of the policy change on mortality coincides with a deterioration in labor market conditions and uptake of disability insurance.