Publications

Abstract

Previous research shows that economic sanctions affect three facets of public opinion in target states: support for the policy at issue, support for the target government, and hostility toward the sanctioner. We explore the dynamics between the facets of opinion and link them to consumer behavior. How do supportive opinions of the policy and the target government lead to hostility? How does this hostility affect consumers’ propensity to buy the sanctioner’s branded products? We examine a case in which China imposed economic sanctions on South Korea in opposition to South Korea’s decision to deploy Terminal High Altitude Area Defense (THAAD). We collect comments from relevant newspaper articles and conduct attitude analysis using machine learning. We conduct difference-in-differences analyses using barcode-level data regarding monthly beer sales, for which we argue boycotts are more likely to occur. We find that a backlash effect in public opinion occurred with respect to two facets of opinion. However, despite the public antagonism, we observe no significant backlash in consumer behavior. These findings imply that effects of economic sanctions in target states are multidimensional and thus it is too simplistic to assess the effectiveness of economic sanctions only by looking at public opinion in target states.


Abstract

An economic sanction is a foreign policy tool that is used to change the behavior or policies of a target state that the sanctioning state deems unacceptable. Economic sanctions often create negative sentiments among individuals in target states. Such negative sentiments can lead individuals to boycott the sanctioner’s branded products in retaliation. We built an agent-based model to examine how individuals start boycotting the sanctioner’s branded products in response to economic sanctions and to identify what factors influence the initiation and continuation of a boycott movement in a target state. In the model, we vary four variables: the threat level of the economic sanction, the media’s reports on the efficacy of the boycott movement, the utility of the sanctioner’s products, and purchase periods. Using these variables, we constructed a baseline model with median values for the four variables. We also created eight scenarios, in which each of the four variables was varied. The results provide new insights into consumer behavior in a target state in response to economic sanctions, as previous studies of economic sanctions focused mainly on public opinion in a target state. We find that the threat level of economic sanctions is crucial in triggering a boycott movement among the first boycotters, and media reports are essential to motivate boycotters to continue the movement. Consumers in a target state are likely to boycott a sanctioner’s product if it has high utility and a short purchase period.


Abstract

Research on the domestic politics of trade typically begins with a theory about who benefits from trade and who is harmed by it. The actors—for instance, firms, workers, or industries—who benefit from trade are expected to support liberalization while those who are harmed are expected to oppose liberalization. For individuals, exposure to globalization through the labor market—including the type of job, firm, or industry—is likely to be an important determinant of individuals’ preferences over policies governing the global economy. To understand the domestic politics of trade with respect to labor, therefore, it is important to ask two key questions. First, what explains the preferences of workers? Broadly, scholars can be divided between those that argue different economic factors (i.e., labor market consequences) explain attitudes toward free trade and those who argue that noneconomic factors (e.g., values, information) are the main drivers of attitudes. Empirical tests of these theories rely on survey data. Second, how do trade pressures influence elections and when do workers’ interests influence policy outcomes? Research on mass politics shows that workers’ interests with respect to trade shape not only support for incumbents in elections but also whether elected officials support free trade. Domestic institutions also play an important role in this process, with research suggesting that democracies and left-leaning governments implement trade policies that are more favorable to workers. Yet trade in the 21st century looks very different from trade 30 years ago. It no longer involves only (or even primarily) the exchange of final goods but also trade in intermediate goods and services. Trade is also closely linked to the production strategies of multinational firms, including offshoring. These fundamental changes in the nature of global economic activity have important implications for the how the interests of workers relate to those of their employers, and by extension the politics of trade. As a result, scholars are increasingly incorporating new models of trade into analysis of politics at the individual and aggregate levels.


Abstract

Recent debates about the 1\% vs. 99\%, CEO compensation, minimum wage, and income inequality suggest an increasingly unfavorable division of economic gains for labor. Indeed, how capital and labor divide the gains from production is central to the study of political economy, particularly the impact of globalization and unionization. Yet, the prominent measures featured in the research to date, most notably labor compensation over GDP, are inadequate for studying the split of gains between labor and capital. We argue that the division of gains between labor and capital is more accurately and precisely conceptualized and measured by the ratio of labor compensation over operating corporate profits in the private sector. Using newly collected private-sector data from 17 industrial democracies over 30 years from 1981 to 2012, our analysis uncovers important patterns. First, labor compensation and corporate profits both rose in absolute terms over the last three decades, but the compensation-profit ratio experienced a sharp decline, meaning that the improvement was smaller for labor than capital. Second, rising economic openness and declining union density contributed to the fall of the compensation-profit ratio. Finally, there was a clear cross-national convergence toward declining compensation-profit ratio, rising openness, and shrinking labor unions. We conjecture that these results point to the movement of advanced industrial democracies toward a new capitalism equilibrium.


Working Papers

  • The Political Economy of High-Skilled Immigration: Sponsorship and votes on High-Skilled Immigration Bills in the U.S. Congress
Abstract

High-skilled immigrants and foreign nationals are an essential component of a country’s economic competitiveness, particularly in the Science, Technology, Engineering, and Mathematics fields. Yet only a small number of foreign nationals are allowed to work in the United States. This paper examines (1) how high-skilled immigration bills in the U.S. have evolved over time and (2) what factors determine high-skilled immigration policy. I relax the fixed-demand assumption of previous research and develop a new theory of the dynamic demand for high-skilled immigration in which a greater supply of skilled labor generates greater demand for skilled labor, possibly creating a virtuous cycle. I focus on liberalizing bills which I categorize into expanding and zero-sum. Expanding bills aim to increase the number of high-skilled immigrants, while zero-sum bills are designed to increase high-skilled immigration at the expense of other types of immigration. To empirically test my theory, I constructed a new legislator-bill level dataset based on high-skilled immigration bills in the House of Representatives, H-1B visa applications, and lobbying reports from 2003 to 2019. I find that high-skilled immigration bills have become more zero-sum in nature over time. Consistent with the dynamic demand theory, I find that demand is a significant factor affecting representative support for high-skilled immigration and that the effect of demand differs by bill type and partisanship. Democrats favor expanding bills, while Republicans favor zero-sum bills. I also find that Democrats are more sensitive to the demand for skilled foreign workers in their districts and react more favorably to expanding high-skilled immigration bills. This finding challenges the conventional wisdom that Republicans are more supportive of all types of high-skilled immigration policy due to their business-friendly nature. By considering the multifaceted nature of immigration bills as opposed to the binary liberalizing/restrictive classification used in past research, this paper unveils hidden dynamics between the labor market factor (demand) and the political factor in immigration policymaking.


  • Reshaping Attitudes toward High-Skilled Immigration with information about labor market competition and international rivalry
Abstract


  • Microfoundations of Firms’ Hiring Preferences toward Native citizens and Foreign Nationals
Abstract

Despite the fact that high-skilled immigration such as the H-1B visa program remains socially and politically contentious, there is still much we do not know about how they affect the economy. For example, studies on the effects of high-skilled immigration on the employment of native citizens have been inconclusive regarding whether foreign labor acts to displace native labor, lowering the number of available positions or the wages paid to workers. Although existing studies tend to implicitly assume that foreign workers have an advantage over, or are at least are equal to native citizens in the labor market, we still do not know whether firms do in fact prefer to hire skilled foreign workers over native citizens. If they do exhibit a preference for either group, we do not know what factors cause them to do so. This paper argues that we need to validate the assumption and to examine the hiring process in such a way as to produce more useful data. To understand the factors that determine who gets hired - effectively studying the labor market before either foreign workers or native citizens join it - this paper uses an audit study and a conjoint experiment with open-ended questions, targeting companies that hire people for the computer-related occupations that account for 80\% of the H-1B visas allowed each year.


  • Economic Sanctions, Hostility, and Consumer Behavior in Target States: Under What Conditions Do Target State’s Public Boycott Sanctioning States in response to Economic Sanctions? (with Jonghyuk Park)
Abstract

Economic sanctions often create a public backlash in target states, thus increasing hostility toward the sanctioner. Under what conditions backlash in public opinion leads to backlash in consumer behavior in response to economic sanctions in target states? Under what conditions do individuals start and sustain a boycott against sanctioner’s products? We offer an agent based model that captures how individuals in target states initiate and engage in a boycott movement. In our model, hostility is the main force that triggers an individual to start a boycott. We further propose four factors that drive hostility: 1) support for the policy that the sanctioner challenges; 2) support for the the target government’s handling of the issue; 3) the baseline feelings toward the sanctioner in the absence of the economic sanctions ; 4) the extent to which sanctions threaten critical businesses in a target state. Using this model, we compare two cases in which South Korea is a target state, and China and Japan are sanctioners respectively. In both cases, the sanctions created negative sentiments, but Koreans’ hostility toward the Japanese government was much greater and led to a boycott of Japanese products in South Korea. We suggest incorporating both opinion and behavior in studying the effects of economic sanctions in target states. Our paper offers an agent-based model that captures both aspects and can be used outside the cases we have examined.