Labor Unions and the Electoral Consequences of Trade Liberalization

We show that the Brazilian trade liberalization in early 1990s led to a permanent relative decline vote share of left-wing presidential candidates regions more affected by tariff cuts. This happened even though shock, implemented right-wing party, induced contraction manufacturing and formal employment regions, despite left’s identification with protectionist policies. To rationalize this response, we consider new institutional channel for political effects shocks: weakening labor unions. provide support mechanism two steps. First, union presence—proxied number workers directly employed unions, density, establishments—declined became exposed foreign competition. Second, negative effect reductions on votes left was driven exclusively parties historical links Furthermore, impact these significant only had unions operating before reform. These findings are consistent hypothesis cuts reduced partly through is fundamentally different from individual-level responses, motivated economic or identity concerns, have been considered literature.