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Trade Liberalization and Mortality
Report

Trade Liberalization and Mortality

Evidence from U.S. Counties

Justin R. Pierce and Peter K. Schott
Federal Reserve Board, 2016
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Editorial Rating

8

Qualities

  • Comprehensive
  • Analytical
  • Eye Opening

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.

Take-Aways

  • US Congressional approval of the Permanent Normal Trade Relations (PNTR) agreement with China in 2000 instituted a reduction in tariff rates of about 13%.
  • Since PNTR, the job base and real household incomes in US counties with established manufacturing centers eroded, hastened by the surge of cheap imported Chinese goods.
  • A 2016 Federal Reserve study indicated that the suicide rate had surged by 29.1% and that deaths by accidental poisoning had increased by 84.2% in response to unemployment hikes of 2.6 percentage points, compared to 2000.

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.

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