Protection and jobs: explaining the structure of trade barriers across industries

This paper develops a model of protection and tests it using US data, including new protection measures. We find that protection in an industry increases with its employment but not with its level of output. We also find that lobbying entails significant transactions costs. We have limited evidence that industry characteristics, such as the number of firms and geographical concentration, affect protection. Nested tests imply that assuming lump-sum rebating of import revenues or rents is justified. The results also suggest that US policy makers weight a dollar of campaign contributions about 15% more heavily than a dollar of national income.