Who Supports Free Trade in Latin America?

This paper examines individual trade policy preferences across 17 countries in Latin America. The focus is on whether skilled or unskilled workers are more likely to support liberalised trade and on whether country characteristics, such as factor endowments, alter the preferences of skilled and unsk...

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Bibliographic Details
Published in:	World economy 2005-07, Vol.28 (7), p.941-958
Main Authors:	Beaulieu, Eugene, Yatawara, Ravindra A., Wang, Wei Guo
Format:	Article
Language:	eng
Subjects:	Developing countries Development Economic conditions Economic Development Economic models Economic reform Empirical research Free Trade Free trade and protection Globalization International trade Labor Labour market Latin America LDCs Public opinion Public Support Skilled workers Skills Social conditions & trends Studies Trade liberalization Trade policy Wage determination
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Summary:	This paper examines individual trade policy preferences across 17 countries in Latin America. The focus is on whether skilled or unskilled workers are more likely to support liberalised trade and on whether country characteristics, such as factor endowments, alter the preferences of skilled and unskilled workers. Based on the standard Heckscher‐Ohlin model and the Stolper‐Samuelson theorem, wage inequality in developing countries will decrease under free trade and unskilled workers will benefit. We find that on average skilled workers are more likely than unskilled workers to support free trade in Latin American countries. Separate country regressions reveal that this pattern is only statistically significant in 8 out of 17 Latin American countries. However, there are no countries in our sample in which unskilled workers are statistically more likely to support free trade than skilled workers, not even in the lowest skill‐endowed country in the sample. We also find that people from Latin American countries with higher GDP, faster growth, more cropland and a longer period of time since reform were more likely on average to support free trade.
ISSN:	0378-5920 1467-9701