Welcoming the Input
Robots, Foreigners, and Foreign Robots: Policy Responses to Automation and Trade
Stephen Chaudoin & Michael-David Mangini
Journal of Politics, forthcoming
Abstract:
We develop a general model of a citizen's demand for policy responses to redistributive shocks like globalization and automation. The model illustrates how a dislike for imports can increase demand for policy responses that 'backpedal' against the shock, such as automation regulation and tariffs, relative to demand for ex post transfers. We use survey experimental evidence from two different designs to support the model's predictions. Treatments emphasizing an automation shock from domestic-origin technology cause citizens to place greater weight on redistribution relative to regulations (backpedaling against automation). A foreign-origin labor shock, e.g. firms moving production abroad, leads to greater weight on protectionism (backpedaling against globalization), which also crowds out demand for redistribution. Most importantly, "making automation foreign" by emphasizing foreign-origin technology re-weights responses towards greater support for regulations and away from redistribution. Our findings explain how support for automation regulations could grow, as politicians increasingly vilify foreign technology.
Optimal Tariffs with Geopolitical Alignment
John Becko, Gene Grossman & Elhanan Helpman
NBER Working Paper, August 2025
Abstract:
As geopolitical tensions intensify, great powers often turn to trade policy to influence international alignment. We examine the optimal design of tariffs in a world where large countries care not only about economic welfare but also about the political allegiance of smaller states. We consider both a unipolar setting, where a single hegemon uses preferential trade agreements to attract partners, and a bipolar world, where two great powers compete for influence. In both scenarios, we derive optimal tariffs that balance terms-of-trade considerations with strategic incentives to encourage political alignment. We find that when geopolitical concerns are active, the optimal tariff exceeds the classic Mill-Bickerdike level. In a bipolar world, optimal tariffs reflect both economic and political rivalry, and may be strategic complements or substitutes. A calibration exercise using U.N. voting patterns, an estimate of the cost of buying votes in the U.N., and military spending suggests that geopolitical motives can significantly amplify protectionist pressures and that the emergence of a second great power can contribute to a retreat from globalization.
Monopsony and the Wage Effects of Migration
Michael Amior & Alan Manning
Economic Journal, forthcoming
Abstract:
If labour markets are competitive, migration can only affect native wages via marginal products. But under imperfect competition, migration may also increase wage mark-downs -- if firms have greater monopsony power over migrants than natives, but cannot perfectly wage-discriminate. While marginal products depend on relative labor supplies across skill cells, mark-downs depend on migrant concentration within them. This insight can help rationalise empirical violations of canonical migration models. Using US data, we conclude that mark-downs grow: this increases aggregate native income, but redistributes it from workers to firms. Policies which constrain monopsony power over migrants can mitigate these adverse wage effects.
The indirect effects of structural power: Political diffusion in the global value chain network
Juan Acevedo-Ossa
International Interactions, forthcoming
Abstract:
In the past few years, scholars have focused on how states use Global Value Chains (GVCs) to weaponize economic and political interdependencies. However, the unintended political consequences stemming from states' positions within these GVCs have not been thoroughly explored. Drawing from Susan Strange's theory of structural power, I argue that GVCs serve as a mechanism for shaping political preferences: States indirectly align with United States policy positions due to their interactions with other partners in the GVC network. In Strange's words, the United States effectively exercises structural power by just "being there." To test this idea, I estimate a multiparametric spatiotemporal autoregressive model (mSTAR) using vote similarity in the UN General Assembly and arms acquisitions as indicators of political preferences and bilateral GVC data as the diffusion mechanism. The results indicate that the existing GVC structure favors the US, irrespective of its interactions with other countries, including China's interactions with other countries.
Warmth of the welcome: Immigration and local housing price dynamics
Xun Bian, Edward Coulson & Xiaojin Sun
Real Estate Economics, July 2025, Pages 648-675
Abstract:
We examine the impact of immigration on local housing price dynamics in the United States. Leveraging a newly developed instrument for US county-level non-European immigration, we find that immigration affects both county-level housing price appreciation and within-county spatial dispersion in housing price changes. Our estimates suggest that, on average, an immigration inflow equal to 1% of a county's initial population raises housing price appreciation by approximately 6.8 percentage points and lowers within-county dispersion by about 1.5 percentage points. Importantly, these effects vary across counties and appear to be shaped by local attitudes toward immigrants. Using several county-level proxies for such attitudes, we find that immigration increases housing price appreciation and reduces within-county dispersion only in counties where residents are more educated, younger, and less racially biased. Overall, our findings highlight that the impact of immigration on housing price dynamics is highly dependent on the local social and demographic context, particularly natives' attitudes toward immigrants.
How the 1942 Japanese Exclusion Impacted U.S. Agriculture
Peter Zhixian Lin & Giovanni Peri
NBER Working Paper, June 2025
Abstract:
In the early 1940s, Japanese American farmers represented a highly skilled segment of the agricultural workforce in the Western United States, characterized by higher education levels and more specialized farming expertise than U.S.-born farmers. During World War II, around 110,000 Japanese Americans (and 22,000 agricultural workers among them) were forcibly relocated from an "exclusion zone" along the West Coast to internment camps. Most never returned to farming. Using county-level panel data from historical agricultural censuses and a triple-difference (DDD) estimation approach we find that, by 1960, counties in the exclusion zone experienced 12% lower cumulative growth in assessed farm value for each percentage point reduction of their 1940 share of Japanese farm workers, relative to counties outside the exclusion zone. These counties also lagged in farm revenues, adoption of high-value crops, mechanization, and adoption of commercial fertilizer. We present suggestive evidence of broader negative spillovers to local economic growth beyond the agricultural sector. Taken together, our findings highlight the long-run economic costs of this policy, illustrating how the loss of skilled farmers can reduce agricultural growth and, in a time of fast technological adoption, may have negative effects on the whole regional development.
Deporting children: Case outcomes for unaccompanied minors facing removal proceedings in US immigration court
Chiara Galli & Tatiana Padilla
Social Forces, forthcoming
Abstract:
Using an originally compiled dataset of over 200,000 cases of unaccompanied minors decided in US immigration court between 2009 and 2023, this paper asks: what determines whether immigrant children are ordered deported? Past work has examined adults' cases, focusing on adjudicator characteristics and legal representation as determinants of case outcomes. We add to newer scholarship that has shifted focus to the role of immigrant characteristics in shaping case outcomes. After accounting for legal representation, where, when, and by whom cases are decided, we find that sociodemographic characteristics, which we consider proxies for stigmatized and racialized identities, are key determinants of case outcomes among immigrant children. Concretely, we find that racialized Latino unaccompanied minors face far higher odds of deportation than all other origin groups. Indigenous language speakers are more likely to be ordered deported than Spanish-speaking children. Conversely, English speakers are less likely to be ordered deported than Spanish speakers. Teenage boys are more likely to be ordered deported, suggesting adultification and similar outcomes to male adults in what scholars have called the gendered racial removal program. This research builds on intersectional understandings of immigration enforcement, showing how race, gender, age, language, and Indigeneity contribute to explaining who is subject to deportation from the United States.
Immigrating into a Recession: Evidence from Family Migrants to the United States
Toman Barsbai, Andreas Steinmayr & Christoph Winter
Journal of Labor Economics, July 2025, Pages 843-883
Abstract:
We analyze the impact of economic conditions at arrival on the economic integration of family-sponsored migrants in the United States. A 1 percentage point higher unemployment rate at arrival decreases annual wage income by 4% in the short run and 2% in the longer run. The loss in wage income results primarily from lower hourly wages due to occupational downgrading. Migrant and family networks help mitigate the negative labor market effects. Migrants who arrive during a recession take up occupations with higher concentrations of fellow countrypeople and are more likely to reside with family members, potentially reducing their geographical mobility.
Rounding up the Effect of Tariffs on Financial Markets: Evidence from April 2, 2025
Felipe Benguria & Felipe Saffie
NBER Working Paper, July 2025
Abstract:
We measure the response of financial outcomes to the US announcement on April 2, 2025, of tariffs on nearly all its trading partners. To address the challenge posed by potential anticipation by economic agents, we decompose these tariffs into a component associated with bilateral deficits and an arguably unanticipated component resulting from the rounding up of the continuous deficit measure to the next whole number or to the baseline 10% rate. We measure the short-term response of stock prices and exchange rates, focusing on all countries with which the US has a bilateral deficit. For both outcomes, the round-up component's effect is an order of magnitude larger than that of the deficit component. We find that a one percentage point higher tariff is associated with a statistically significant 0.23% decline in stock prices. Further, we find no evidence of a dollar appreciation; if anything, higher tariffs are associated with a dollar depreciation, driven by countries with a floating regime. We show this is consistent with a model that allows for trade reallocation and in which exports to the US are invoiced in dollars while exports to the rest of the world are partly invoiced in producer currency.