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The Payoff to America from Globalization: A Fresh Look with a Focus on Costs to Workers

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  • Gary Clyde Hufbauer

    (Peterson Institute for International Economics)

  • Zhiyao (Lucy) Lu

    (Peterson Institute for International Economics)

Abstract

Hufbauer and Lu, updating a landmark PIIE study made in 2005, calculate the payoff to the United States from trade expansion from 1950 to 2016 at $2.1 trillion. The payoff has stemmed from trade expansion resulting from policy liberalization and improved transportation and communications technology. The sum translates into an increase of $7,014 in GDP per capita and $18,131 in GDP per household. The potential gains from future policy liberalization could be as large as $540 billion for the United States by the year 2025, or an increase of $1,670 in GDP per capita and $4,400 in GDP per household. On the other hand, 156,250 manufacturing sector jobs were lost annually over the past 13 years, representing less than a percent of the number of people involuntary separated from their jobs each year. A more generous unemployment insurance program and expanded tax credits would help displaced workers adjust, the authors argue, while preserving the large gains resulting from trade expansion.

Suggested Citation

  • Gary Clyde Hufbauer & Zhiyao (Lucy) Lu, 2017. "The Payoff to America from Globalization: A Fresh Look with a Focus on Costs to Workers," Policy Briefs PB17-16, Peterson Institute for International Economics.
    • Handle: RePEc:iie:pbrief:pb17-16
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    Cited by:

    1. Metivier, Jeanne & Di Salvo, Mattia & Pelkmans, Jacques, 2017. "Transatlantic Divergences in Globalisation and the China Factor," CEPS Papers 12584, Centre for European Policy Studies.

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