Nov 24, 2016

China trade, and mortality among white middle-aged men

New research has found a link between rising imports from China and a wave of suicides and drug-related deaths across the US.
The study, by Federal Reserve economist Justin Pierce and Peter Schott of Yale University, adds a new piece to the puzzle of rising mortality among middle-aged white men in many parts of the US, as well as the surge of antitrade rhetoric during the presidential election.
It finds a “statistically significant relative increase in suicide…concentrated among white males” from 2000, a year that saw Congress grant China permanent normal trade relations, which helped codify China’s status as a rising trade power. Since then Chinese imports to the US have surged around fivefold to $US483 billion ($654.7bn) last year.
The authors investigated how suicide and drug-related death rates changed across US counties from 2000. They found those counties with workers whose jobs were relatively more vulnerable to Chinese competition—as measured by employment-weighted implied tariff cuts their industries experienced—saw increases in death rates that couldn’t be explained by other factors.
The authors were motivated by recent research by Anne Case and Nobel laureate Angus Deaton that showed rising mortality rates for white US men ages 45 to 54.
“The thing about that paper that we noticed was that the trend started in 2000, when you see a big jump in US imports from China and a huge loss in manufacturing jobs,” Mr Schott said.
Around half of the decline in total US manufacturing employment, which fell around three million over the five years from 2000, has been linked to rising Chinese imports.
The authors found that the most affected counties were in the Southeast. Around a quarter were barely affected at all, as they contained little manufacturing or agriculture, sectors more susceptible to trade competition. Counties with an average level of exposure to Chinese competition experienced roughly a 3.5 per cent increase in their suicide rate and a 24 per cent jump in accidental poisoning. Those levels imply a few thousands extra deaths a year across the country. The effects appeared to be lasting.
“Suicides could lead to more suicides or new economic consequences could take time to push people over the edge,” Mr Schott said.
Mr Schott and his co-author also demonstrated a tight link between counties more exposed to tariff reductions and increases in joblessness, which leads to lower income and reduced quality of life. A county whose unemployment rate increased by one percentage point experienced an 11 per cent increase in the suicide rate.
Mr Schott said shutting down trade liberalisation was the wrong lesson to take from the paper. “That hurts everyone, and we want the increases in productivity and reductions in prices that trade brings,” he said. “We need to care about the workers, not the jobs.”
He advocated greater spending on programs to re-skill workers and help them to move into growing sectors of the economy.
The research pointed out that freer trade could improve health outcomes in other areas that enjoyed cheaper goods and services.
Wall Street Journal

No comments: