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We develop a multi-sector gravity model with heterogeneous workers to quantify the aggregate and group-level welfare effects of trade. We estimate the model using the structural relationship between China-shock driven changes in manufacturing employment and average earnings across US groups defined by commuting zone and education. We find that the China shock increases average welfare but some groups experience losses as high as five times the average gain. Adjusted for plausible measures of inequality aversion, gains in social welfare are positive and only slightly lower than with the standard aggregation.

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Ethnic divisions have been shown to adversely affect economic performance and political stability, especially in Africa, but the underlying reasons remain contested, with multiple mechanisms potentially playing a role. We utilize lab experiments to isolate the role of one such mechanism--ethnic preferences--which has been central in both theory and in the conventional wisdom about the impact of ethnic differences. We employ an unusually rich research design, collecting multiple rounds of experimental data with a large sample of 1,300 subjects in Nairobi; employing within-lab priming conditions; and utilizing both standard and novel experimental measures, as well as implicit association tests. The econometric approach was pre-specified in a registered pre-analysis plan. Most of our tests yield no evidence of differential altruism towards coethnics relative to non-coethnics. The results run strongly against the common presumption of extensive ethnic bias among ordinary Kenyans, and suggest that other mechanisms may be more important in explaining the negative association between ethnic diversity and economic and political outcomes.