PUBLIC FINANCE AND INDIVIDUAL PREFERENCES OVER GLOBALIZATION STRATEGIES

Do preferences toward globalization strategies vary across public-finance regimes? In this paper, we use data on individual preferences toward immigration and trade policy to examine how pre-tax and post-tax cleavages differ across globalization strategies and state fiscal jurisdictions. High exposure to immigrant fiscal pressures reduces support for freer immigration among U.S. natives, especially the more skilled. The magnitude of this post-tax fiscal cleavage is comparable to the pre-tax labor-market effects of skill itself. There is no public-finance variation in opinion over trade policy, consistent with U.S. trade policy having negligible fiscal-policy impacts. Public finance thus appears to shape opinions toward globalization strategies. Copyright 2007 Blackwell Publishing Ltd..