DP4018 Heckscher-Ohlin Theory and Individual Attitudes Towards Globalization

Author(s): Kevin Hjortshøj O'Rourke
Publication Date: August 2003
Keyword(s): attitudes, globalization, Heckscher-Ohlin theory, survey data
JEL(s): F10, F20
Programme Areas: International Trade and Regional Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=4018

The aim of the Paper is to see whether individuals’ attitudes towards globalization are consistent with the predictions of Heckscher-Ohlin theory. The theory predicts that the impact of being skilled or unskilled on attitudes towards trade and immigration should depend on a country’s skill endowments, with the skilled being less anti-trade and anti-immigration in more skill-abundant countries (here taken to be richer countries) than in more unskilled-labour-abundant countries (here taken to be poorer countries). These predictions are confirmed, using survey data for 24 countries. The high-skilled are pro-globalization in rich countries; while in some of the very poorest countries in the sample being high-skilled has a negative (if statistically insignificant) impact on pro-globalization sentiment. More generally, an interaction term between skills and GDP per capita has a negative impact in regressions, explaining anti-globalization sentiment. Furthermore, individuals view protectionism and anti-immigrant policies as complements rather than as substitutes, as they would do in a simple Heckscher-Ohlin world.