Summary of Trade Liberalization and Mortality

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Qualities

  • Comprehensive
  • Eye Opening
  • Analytical

Recommendation

In 2000, the United States permanently normalized trade relations with China. Between then and 2013, mortality rates for white males increased by a “statistically significant” amount in US counties with high concentrations of manufacturing employment. This fascinating but complex report by economists Justin R. Pierce and Peter K. Schott dissects some of the externalities associated with trade policies. The authors explain the link between lower tariff rates for Chinese goods and higher US mortality rates as due to financial and economic stress on the workers who lost their jobs. getAbstract recommends this sobering study to policy makers, business leaders and employees.

About the Authors

Justin R. Pierce is an economist with the Board of Governors of the Federal Reserve System. Peter K. Schott is a professor of economics at the Yale School of Management.

 

Summary

Free trade can deliver multiple benefits, such as increased export capacity, the opening of new markets and reduced global prices. Yet the overall net positives of trade often don’t compensate for the negative externalities that occur as a result of direct foreign competition.

The US Congressional approval of the Permanent Normal Trade Relations (PNTR) agreement with China in 2000 instituted an estimated reduction of tariff rates of about 13%. Since PNTR’s passage, the job base and real household incomes in US counties with established...


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