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The impact of the 1932 General Tariff: a difference-in-difference approach

Accepted version
Peer-reviewed

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Type

Article

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Authors

Lloyd, SP 

Abstract

We evaluate the effect of the 1932 British General Tariff on the output, labour productivity and employment growth of British industries. We provide a new disaggregated data set that matches industry-level Census of Production data with industry-specific tariff rates to accurately isolate treatment and control groups and estimate the effect of the General Tariff using difference-in-difference regressions. We evaluate a two-group comparison, between newly and non-newly protected industries, and a three-group comparison, between non-newly protected industries and newly protected industries further divided into those given a baseline 10 percent tariff rate and those given additional tariffs. In the two-group comparison, we identify a tariff effect that is large and statistically significant on output and productivity. In the three-group comparison, we show that the positive output and productivity effects of the tariff arise from the additional tariff protection, over and above the 10 percent level. These effects are observed over the periods 1930-35 and 1930-48, suggesting both short-run and medium-term effects on output and productivity of UK industries protected by the 1932 General tariff.

Description

Keywords

Trade policy, General Tariff, Difference-in-difference

Journal Title

Cliometrica

Conference Name

Journal ISSN

1863-2505
1863-2513

Volume Title

14

Publisher

Springer Science and Business Media LLC

Rights

All rights reserved