Early labor market experience and preferences for social spending: the impact of occupational exposure to foreign demand.

Abstract

An individual's early labor market experience and the associated workplace socialization constitute an important time in a person's life. During those years, the labor market entrant interacts with her superiors, her senior colleagues and with her firm's broader ecosystem. During this process, she is exposed to discourses that emphasize the firm's interests, as well as a narrative that tends to conflate the firm's interests and the interests of its employees, which likely contributes to shape her economic policy preferences. This paper asks the following questions: how does early socialization in the workplace contribute to shape economic attitudes, and does it have a lasting impact on these attitudes? Using data from the Swiss Household Panel, I investigate the trajectory of young individuals during their early years on the labor market to gain insight about the interplay between occupational characteristics and economic attitudes. In line with recent findings in the trade exposure literature that emphasize the association between exposure to foreign demand and concerns over international competitiveness, I find that labor market entrants in occupations associated with export-dependent sectors develop hostile preferences vis-à-vis social spending. Taking advantage of the panel structure of the data, I show that while individuals do self-select into occupations based on pre-existing preferences-confirming that the self-selection mechanism is relevant to the occupation-preferences link-, they also adjust these preferences as a result of their early labor market experience-confirming the importance of the socialization mechanism.