Open or Closed
When Trade Hits Home: Family Exposure and Gendered Political Cleavages
Soohyun Cho & Thomas Flaherty
Texas A&M University Working Paper, October 2025
Abstract:
What explains divergent public support for globalization barriers versus welfare compensation? Existing political economy approaches emphasize individuals' labor market characteristics without accounting for linkages within families. We develop a theory that incorporates intra-family risk sharing into the Ricardo-Viner model, showing how economic shocks diffuse through family ties to shape policy preferences toward globalization and welfare. Using data from the U.S. General Social Survey (1996-2014), we test this theory by tracking how an exogenous trade shock from Mexico propagates through families to affect respondents' preferences across twelve policies. When respondents' family members face exogenous import shocks, respondents significantly increase support for a variety of globalization barriers and welfare compensations, independently of their own industry exposure. Our analysis also corroborates the theory's important gendered implications: the protectionist effect of family exposure is primarily driven by male members while the welfare compensation effect primarily reflects female members. The results are robust to pre-treatment trends, placebo policy preferences, and voting behaviors. Our theory and analyses underscore the importance of moving beyond individual voter characteristics to understand fully political cleavages over economic policy.
Immigration and US shelter prices: The role of geographical and immigrant heterogeneity
James Cabral & Walter Steingress
European Economic Review, February 2026
Abstract:
The arrival of immigrants increases demand for housing and puts upward pressure on shelter prices. Using instrumental variables based on the ancestry composition of residents in US counties, we estimate the causal impact of immigration on local shelter prices. We show that the impact of immigrants is heterogeneous across locations. The increase in shelter prices is greater in counties where immigrants have higher levels of education and in counties that issue fewer building permits. We also find that the house prices respond more to immigration than rent prices do. The larger issuance of building permits for multi-unit homes than for single-unit homes can reconcile the different price reactions.
Tracking the Short-Run Price Impact of U.S. Tariffs
Alberto Cavallo, Paola Llamas & Franco Vazquez
NBER Working Paper, November 2025
Abstract:
We use high-frequency retail microdata to measure the short-run impact of the 2025 U.S. tariffs on consumer prices. By matching daily prices from major U.S. retailers to product-level tariff rates and countries of origin, we construct price indices that isolate the direct effects of tariff changes across goods and trading partners. Prices began rising immediately after the broader tariff measures announced in early March and continued to increase gradually over subsequent months, with imported goods rising roughly twice as much as domestic ones. Our estimated retail tariff pass-through is 20 percent, with a cumulative contribution of about 0.7 percentage points to the all-items Consumer Price Index by September 2025. Our results show that tariff costs were gradually but steadily transmitted to U.S. consumers, with additional spillovers to domestic goods.
The impact of granting undocumented immigrants driver's licenses on fatal crashes
Ruinan Zhao
Journal of Policy Analysis and Management, forthcoming
Abstract:
This paper examines the effect of granting undocumented immigrants driver's licenses on fatal crashes. Using county-level crash data from the Fatality and Injury Reporting System Tool, I leverage the quasi-randomness of the timing of the driver's license reforms adoption across states to identify the causal effect of driver's license reforms. My findings show that granting undocumented immigrants driver's licenses increases overall fatal crashes by nearly 5%, equivalent to 0.46 more fatal crashes in a county per year. The effect is stronger in states with a higher population of undocumented immigrants. By investigating the mechanism through which the policy impact is likely to occur, I show that undocumented immigrants may be more likely to engage in risky driving behavior once they obtain driver's licenses. Several robustness checks and placebo tests support my main findings.
When Words Open Wallets: The Impact of Hate Speech on Social Cooperation
Anke Hielscher et al.
Harvard Working Paper, November 2025
Abstract:
We study how hate speech affects prosocial behavior in a laboratory setting. Participants act as "citizens" in an asymmetric taxation game, deciding how much of their endowment to redistribute to a real student refugee. Before deciding, they view a newspaper infographic on fears about immigration, paired with mostly kind comments, mostly hateful comments, or no comments. The article sharply reduces redistribution, but kind comments fully offset this effect. Surprisingly, hateful comments also increase contributions, consistent with psychological reactance. Our results provide causal evidence that offensive speech can strengthen prosocial behavior and highlight the behavioral relevance of imperfect content moderation.
An Anatomy of the Great Reallocation in US Supply Chain Trade
Laura Alfaro & Davin Chor
NBER Working Paper, November 2025
Abstract:
This paper documents stylized facts about the "Great Reallocation" in US supply chain trade following the 2018-2019 tariff shocks and the April 2025 Liberation Day announcements. We find that: (i) The US has decoupled from China but not from the world overall. (ii) US imports diversified mainly among its top-20 partners, rather than expanding to new source countries. (iii) Local linear projections confirm ongoing declines in China's import shares, with compensating increases from Vietnam, Mexico, and Taiwan. (iv) Most of this shift occurred along the product-level intensive margin, though extensive margin adjustments became more pronounced for Vietnam and India from 2021-2024. (v) After a period of "wait and see", the decline in import shares from China spread to contract-intensive and relationship-sticky goods by 2021-2024. (vi) Early 2025 data suggest that trade reallocation has already accelerated after Liberation Day, in favor of trade partners facing lower additional tariffs and with geographically proximate supply networks. Together, these findings show that the US-China tariff shocks have unwound the US' sourcing from China back to where it stood at the time of China's WTO accession.
Shutting Down Japantown: The Effects of WWII Internment on Japanese American Enclaves
Martin Saavedra & Tate Twinam
NBER Working Paper, November 2025
Abstract:
During World War II, the U.S. government incarcerated all West Coast Japanese Americans in internment camps. We ask how this forced displacement affected Japanese American enclaves. Using the recently digitized 1940 and 1950 full-count censuses, we measure changes in the racial composition of neighborhoods across 14 major cities. We find that internment reduced the Japanese American population of enumeration districts within the exclusion zone by 25-50% relative to their 1940 levels, and that these individuals were replaced by African American in-movers in a nearly 1-to-1 fashion. Outside the exclusion zone, new Japanese American enclaves formed, but did not approach the scale of their historic West Coast counterparts.