This just in

On Yale & Yale alumni.
Ico print Print | Ico email Email | Facebook | | RSS

China trade deal cut US manufacturing jobs by 30 percent, Yale economist says

In a field where academic papers often sport neutral, descriptive titles ("Vertical and Horizontal Decentralization and Ethnic Diversity in Sub-Saharan Africa"), Yale economist Peter Schott seemingly cuts to the chase.

But the title of his new working paper, “The Surprisingly Swift Decline of U.S. Manufacturing Employment,” tells only half the story. The fugitives in this chase—American manufacturing jobs—are readily apparent. The more interesting half turns out to be the cause of their flight: the “granting of permanent normal trade relations to China in late 2000.”

That decision eliminated the threat of big increases in tariffs on Chinese goods entering the US, Schott and coauthor Justin Pierce of the Federal Reserve Board note. In the very next year, 1.5 million US manufacturing jobs disappeared.

Overall, Schott (a professor at the Yale School of Management) and Pierce “argue that employment in the manufacturing sector in the United States was 29.6 percent lower than it otherwise would have been," the Washington Post’s Wonkblog explains. “That means that employment in that sector would have grown — by close to 10 percent, Pierce and Schott estimate — as opposed to shrinking considerably, as it actually did.”

The working paper was recently published online by the private, nonprofit National Bureau of Economic Research.

Filed under Peter Schott, School of Management, China
The comment period has expired.