What Determines Individual Preferences Over Trade and Immigration Policy?

This paper uses three years of individual-level data to analyze the determinants of individual preferences over trade and immigration policies in the United States. Different economic models make contrasting predictions about what forces should shape these preferences. We have four main empirical results. First, we find that factor type dominates industry of employment in explaining support for trade barriers This result is consistent with a Heckscher-Ohlin model of the United States in which the country is well endowed with skilled labor relative to the rest of the world. Second, we find that home ownership also matters for individuals' trade-policy preferences. Independent of factor type, home ownership in counties with a manufacturing mix concentrated in comparative-disadvantage industries is strongly correlated with support for trade barriers. This finding suggests that in addition to current factor incomes driving preferences as in standard trade models, in reality preferences also depend on asset values. Third, less-skilled workers are significantly more likely to prefer limiting immigrant inflows into the United States. This result suggests that over time horizons relevant to individuals when evaluating immigration policy, individuals think that the U.S. economy absorbs immigrant inflows at least partly by changing wages. These preferences are consistent with a "multi-cone" Heckscher Ohlin trade model and with a factor-proportions-analysis labor model. Fourth, we find no evidence that less-skilled workers in high-immigration communities are especially anti-immigrationist. These preferences are inconsistent with an area-analysis labor model. The overall message of the paper is that less-skilled Americans are much more likely to oppose globalization.