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Title Pre-Analysis Plan: The Wall and the Welfare State - How changes in trade interdependency between the U.S. and Mexico affect risk perception and individual social policy preferences
Post date 11/08/2018
C1 Background and Explanation of Rationale We promote the argument that countries’ economic structural interdependence based on trade relationships influence individual preferences for social policy programs. When a central trading partner raises barriers in the form of increased tolls and tariffs it will increase the perception of labor market vulnerability and economic risk. Subsequently, increased risk perception should fuel different demands for different types of social policy reforms. Labor market segmentation into formal and informal workers thereby moderates the impact of risk. Our analysis contains two steps: the impact of changing trade relationships on individual economic risk perception, and, subsequently, the effect of risk on social policy preferences. To investigate the first part of the argument, we use a vignette experiment that primes individuals about hazards of changes in current trade relationships between Mexico and the U.S.. Next, we analyze how risk perception influences social policy preferences and how far different redistribution coalitions arise. As workers embedded in notoriously permeable labor markets not only frequently switch the sector of employment, but also share households with a spouse who works e. g. in the informal sector, social policy preferences cannot be simply derived from income level. Using a conjoint experiment that models the trade-off between different social policies and different degrees of scope, level, and who pays for it, allows to study the effect of increased risk perception and employment sector on policy preferences in a more nuanced way. We study our argument with an experimental survey for the case of Mexico in 2018.
C2 What are the hypotheses to be tested?

Prediction 1 Mexicans who worry about negative economic effects of U.S. trade policy are more likely to feel insecure about their own job situation.
Prediction 1.a Mexican informal sector workers who worry about negative economic effects of U.S. trade policy are more likely to feel insecure about their own job situation compared to formal sector workers.
Prediction 2 Formal sector workers who are more exposed to economic insecurities are more likely to support a contribution-based than a universal or means-tested social policy.
Prediction 3 Informal sector workers who are more exposed to economic insecurities are more likely to support universal than contribution-based or means-tested social policy.
Prediction 4 Mexicans who fear to be cut from remittances from relatives in the U.S. are more likely to support an increase in social policy.
Prediction 5 Formal sector workers who were informally employed in the past years are more likely to support a universal than a contribution-based or means-tested social policy.
Prediction 6 Formal sector workers who expect to lose the job/to work in the informal sector in the near future are more likely to support a universal than a contribution-based or means- tested social policy.
Prediction 7 Informal sector workers are more likely to support an increase for a universal social policy if the form of financing is based on contributions from the government increasing taxes from people with higher incomes or based on workers with written contract and the government.
Prediction 8 Formal sector workers are more likely to accept an increase of contribution-based social policy if the form of financing is on contributions from the government increasing taxes from people with higher incomes or with contributions from the government with increased taxes.
Prediction 9 Formal sector workers who are more exposed to economic insecurities, and share a household with an informal sector worker, are more likely to support a contribution-based than a universal social policy.
Prediction 10 Formal sector workers who are more exposed to economic insecurities and share a household with an informal sector worker are more likely to support a universal than contribution-based social policy.
Prediction 11 Informal workers who are more exposed to economic insecurities are more likely to support an increase of social benefits for people in need.
Prediction 12 Formal workers who are more exposed to economic insecurities are more likely to support a system of social justice in which only those individuals receive benefits who also contribute to it.
Prediction 13 Mexicans who are more exposed to re-migration from Mexicans that are coming back from the U.S. are more likely to support an increase in level of [social policy] benefits.
Prediction 14 Mexicans who are more exposed to migration from Central America are more likely to support a contribution-based social policy.

C3 How will these hypotheses be tested? * The experimental survey will be conducted face-to-face (computer-assisted-personal interviewing) through the Mexican survey company BGC (Beltrán, Juárez y Asociados). Instead of a nationally representative survey, which would go beyond our funding capacities and due to difficulties to field the survey in geographic areas dominated by drug cartels, we aim at drawing a random sample of Mexicans in two average federal states, Puebla and Querétaro. Thereby, we focus on selecting two states of Mexico with average values on trade and GDP per capita as this allows to reach the active working population without over- or underestimating a possible impact from changes in trade interdependencies. The survey company will interview roughly 1‘400 individuals in total, therefore around 700 persons per state. The survey consists of two parts: an observational and an experimental section. We employ a vignette experiment to test the first part of the argument regarding the impact of trade related risks on individual vulnerability. Furthermore, we investigate the demand for welfare state programs (universal, contributory or needs-based benefits) with the use of a conjoint experiment.
C4 Country Mexico
C5 Scale (# of Units) 1,400
C6 Was a power analysis conducted prior to data collection? Yes
C7 Has this research received Insitutional Review Board (IRB) or ethics committee approval? The study was submitted to the ethics board of the University of Cologne but had not yet been reviewed at the time of registration. Confirmation was provided to EGAP on 2/26/18
C8 IRB Number not provided by authors
C9 Date of IRB Approval 2/20/19 (confirmation submitted to EGAP on 2/26/19)
C10 Will the intervention be implemented by the researcher or a third party? Beltran, Juárez y Asociados
C11 Did any of the research team receive remuneration from the implementing agency for taking part in this research? No
C12 If relevant, is there an advance agreement with the implementation group that all results can be published? Yes
C13 JEL Classification(s) O170, H4, O54, E2