The gap between red and blue America has been expanding for decades, and the consequences of this increasing polarization are clear to close oberserves of Washington

But why Americans have grown so far apart in the first place is still a complicated, unanswered question.

Part of the story appears to be the sudden rise of China as an export powerhouse, according to a paper in the October issue of the American Economic Review.

Authors David Autor, David Dorn, Gordon Hanson, and Kaveh Majlesi say that trade competition from China has redicalized many Americans in declining manufacturing towns. Long-term joblessness and insecurity has pushed people in those communities to the far-right and far-left edges of the political spectrum.

But Hanson says in this episode of the Research Highlights podcast that it's not a failure of trade policy. It's a failure of America's safety net to protect the workers hit hardest by Chinese imports.

Hanson recently spoke with the AEA's Tyler Smith about how economic and cultural insecurity drive hyper partisanship and what policymakers can do to help areas distressed by the China trade shock.

Populism's rise has sparked fundamental questions for advanced democracies around the world.

Perhaps the biggest question is why it's happening. Some research points to economic explanations. Americans who gravitated to President Trump's nationalistic appeals and British voters who approved leaving the European Union were frustrated by job losses associated with globalization. And that anxiety made them susceptible to politicians who promised to claw back their economic power.

Political scientist Yotam Margalit says that explanation is overstated. He says that long-term cultural changes, like growing ethnic diversity and the shift toward urbanization, are bigger factors underlying the populist appeal.

These changes have sparked resentments among some groups that threaten to undermine liberal democracy, itself.

The IRS knows that taxpayers hide a large chunk of their wealth overseas. According to the best estimates, Americans hold more than a trillion dollars in offshore tax havens.

But it's not easy to find those secret accounts and make tax dodgers pay their fair share.

In the August issue of the American Economic Journal: Economic Policy, Daniel Reck says that an array of enforcement efforts in 2008 provide a starting point.

He and his co-authors Niels Johannesen, Patrick Langetieg, Max Risch, and Joel Slemrod looked at how special incentives, better information sharing, and more aggressive prosecution by US authorities led to the voluntary disclosure of thousands of foreign accounts.

Overall, the new compliance raised nearly a billion dollars in annual tax revenue. However, Reck says that more progress is needed to understand how the ultra wealthy use complex networks of ownership to hide their assets.

The US spends nearly $50 billion a year on job-creating business incentives. Unfortunately, a lot of this money doesn't go to the places that need it most.

Upjohn Institute senior economist Tim Bartik says that policymakers must do more to invest in distressed regions. In the Journal of Economic Perspectives, he argues that policymakers could get more bang for their buck by targeting needy communities. Even more, economic development officials need to broaden their approach beyond cash grants and tax incentives, which might be politically popular but are less effective at generating jobs than skills training, brownfield development, or other programs.

Bartik spoke with the AEA's Chris Fleisher about which incentives are most effective, the trade-offs of becoming a high-tech hub, and why places will continue to matter even when more workers are doing their jobs from home.

Black, Latinx, and Native American people are badly underrepresented in economics. In 2017, they were 30 percent of the US population, but earned fewer than 10 percent of economics PhDs.

The question now facing economists is why minorities are opting for other careers.

To find out, Gary Hoover of the University of Oklahoma reached out to minorities still in the profession, as well those who ultimately decided to leave it.

He and his co-authors Amanda Bayer and Ebonya Washington published their in-depth survey results in the Summer issue of the Journal of Economic Perspectives.

While some respondents faced openly hostile environments, many graduate students and faculty said that more subtle forms of biases made them feel like outsiders.

Hoover says that all economists can do more to inform, mentor, and welcome underrepresented groups. But it starts with listening.

He recently spoke with the AEA's Tyler Smith about minority experiences in economics, including his own, and some concrete steps for making the profession more inclusive.

This week marks the centennial of women's enfranchisement in the United States and women have never been so politically powerful—or politically divided with men.

The "sex gap" in partisanship and voter turnout continues to widen. Once willing to defer the work of politics to men, women now have a 4 percentage point advantage in voter turnout. The partisanship gap has also grown. Women are 12 percentage points more likely to identify with the Democratic Party.

Dartmouth professor Elizabeth Cascio says the shifts in turnout reflect generational change. The gains have come from younger, higher-participation cohorts replacing older women who were less likely to vote. On the other hand, women of all ages have contributed to the changes in partisanship. The increasing Democratic identification of women is less about women becoming more liberal and more about how Democrats and Republicans have come to differentiate themselves.

Her paper with co-author Na'ama Shenhav looking back on a century of the American woman voter appears in the Spring issue of the Journal of Economic Perspectives. Cascio recently spoke with the AEA's Chris Fleisher about how women's political influence has evolved differently from men's and the factors driving that change.

The amount of money in politics seems to grow every year. Spending by outside groups reached a record of half billion dollars in the 2016 elections cycle, and lobbying expenditures regularly exceed $3 billion annually.

But economists Marianne Bertrand and Matilde Bombardini argue that a lot of corporate influence is still overlooked.

In the July issue of the American Economic Review, they estimate that as much as $1 billion a year of corporate philanthropy is used to sway congressional representatives. For a typical year, that's over twice as much as contributions form political action committees (PAC).

Money from corporate foundations could be having a far reaching effect on how our laws and regulations get written. But unlike traditional lobbying, there are few transparency requirements for such charitable spending.

Professors Bertrand and Bombardini recently spoke with the AEA's Tyler Smith about the political influence that corporations wield through their charities and what can be done about it.

Theme music is by Sound of Picture.

Even before there was President Trump, there was "the wall."

America has spent billions on border enforcement, which includes a barrier between the US and Mexico. And the current administration's nationalistic promises to put "America first" have given the border wall heightened symbolic importance. But it's not clear just how effective it is in actually preventing migrants from entering the US.

Ben Feigenberg says the wall does, in fact, have a substantial impact on the number of people crossing the border. In the July issue of the American Economic Journal: Applied Economics, he says that construction of a border fence reduced migration by up to 35 percent. However, that doesn't seem to be any more cost-effective than hiring more border patrol agents.

The AEA's Chris Fleisher spoke with Feigenberg about what his research says about the effectiveness of border walls, potential unintended consequences, and how economics can inform debates around policing and criminal justice.

*Theme music is by Sound of Picture.

The world has been adjusting to the information age for the last 50 years now. And so have its autocracies, according to our guest today.

Daniel Treisman, political scientist at UCLA, says that illiberal leaders are building modern authoritarian regimes with a new set of tools to keep themselves in power.

In the Fall 2019 issue of the Journal of Economic Perspectives, Treisman and his coauthor Sergei Guriev described these so-called informational autocrats, which no longer terrorize their citizens like traditional autocrats—if they can avoid it.

Instead, these dictators suppress widespread knowledge of their own incompetence and criminal activity by manipulating major media outlets, disguising themselves as democracies, and hiding their violence.

In such an atmosphere, unflattering stories about leaders tend not to reach the general public.

Professor Treisman recently spoke with the AEA's Tyler Smith about how informational autocrats retain their power, why they had to adapt, and how new coalitions may be able to fight back.

Swarthmore professor Amanda Bayer has worked much of her career to address diversity in economics. She has published papers about it, served on the AEA's Committee on the Status of Minority Groups in the Economics Profession, and co-organized a national summit on the topic with the Federal Reserve. She is also the creator and editor of Diversifying Economic Quality, a widely read online resource that promotes inclusive, innovative, and evidence-based teaching practices in economics. She also helped develop the AEA's "Best Practices for Economists" aimed at building a more diverse and inclusive profession.

In this 2017 interview, the AEA's Chris Fleisher and Diana Schoder talk with Bayer about the severity of the gender gap in economics, why addressing it is more than an issue of fairness, and her own experiences as she advanced her career.