Trade exposure and social cohesion: Evidence from Uganda

December 5, 2023 @ 2:30 pm – 3:30 pm Europe/Rome Timezone
Seminar Room 4, Badia Fiesolana
Mia Saugman
Kasper Vrolijk examines and offers causal evidence on the link between trade exposure and social cohesion using rich micro tax data and a natural experiment of exchange rate liberalisation in Uganda. Results show that exposure to exogenous exchange rate shocks has significant albeit economically small effects on social cohesion: it reduces trust, enhances participation, and has ambiguous effects on identity. These effects operate largely through the expenditure channel (or household exposure) and to a lesser extent through the earnings channel (captured by worker and firm exposure).