Free Trade May Have Cost American Lives as Well as Jobs
NAFTA wiped out US manufacturing work and led to rising death rates, research suggests.
- By
- April 08, 2026
- CBR - Economics
The hollowing out of manufacturing in the United States has been blamed for societal ills ranging from growing drug and alcohol abuse to declining rates of marriage and civic engagement.
Research from MIT’s Amy Finkelstein, Chicago Booth’s Matthew J. Notowidigdo, and MIT PhD student Steven Shi points to one particularly devastating social cost of manufacturing’s decline: Mortality rates tend to increase in affected areas. Analyzing the impact of the landmark North American Free Trade Agreement, the researchers find a notable increase in the death rate among the sectors of US society that were most directly exposed to the trade pact’s effects.
When Canada, Mexico, and the US put NAFTA into force 32 years ago, it was the most comprehensive free-trade agreement ever negotiated. Over time, it effectively created a single, 400-million-person market that accounted for about one-third of world output.
NAFTA was hotly debated in the US prior to its passage. Proponents argued that it would generate new employment opportunities and reduce North American income disparities. Opponents in the US cautioned that it would cause huge job losses for the country. Billionaire Ross Perot famously warned during his populist 1992 presidential campaign that NAFTA would create a “giant sucking sound” as US factory work moved across the southern border to Mexico, where wages were far lower.
NAFTA indeed dealt a blow to US manufacturing. Finkelstein, Notowidigdo, and Shi find the regions highly exposed to the free-trade agreement experienced declines in employment. According to their analysis, even though manufacturing made up just 19 percent of the total workforce in 1993, it accounted for about 80 percent of NAFTA-related job losses. Prior research, from the International Monetary Fund’s Shushanik Hakobyan and John McLaren of the University of Virginia, has also found exposed regions suffered falling wages in the wake of the pact.
To gauge the impact of NAFTA on mortality rates, Finkelstein, Notowidigdo, and Shi analyzed census data for annual employment-to-population trends between 1986 and 2016. They also compiled annual mortality rates for commuting zones, which partition the continental US into 722 areas designed to approximate local labor markets.
As the pact began ratcheting down tariff rates in 1994, the hardest-hit US regions started experiencing declines in manufacturing employment that, over time, were mirrored by increasing mortality rates relative to less-exposed areas, Finkelstein, Notowidigdo, and Shi find.
Where free trade hit hardest
In the 15 years following NAFTA’s implementation, “a commuting zone with average exposure to Mexican import competition experienced an increase in annual, age-adjusted mortality of 0.68 percent,” the researchers find. For every 1 percentage point drop that NAFTA caused in a region’s employment-to-population rate, age-adjusted mortality increased by about 1.5 percent.
Both the job losses and mortality increases related to NAFTA were disproportionately concentrated among men who in 1994 were 25–44 years old. But the study also documents a rise in NAFTA-induced mortality rates among individuals aged 65 and over. It’s possible that elderly people suffered by receiving less financial support from children or grandchildren who lost jobs, the researchers speculate.
When they looked at how exposure to import competition from China—another trade-related source of manufacturing job loss—affected overall mortality rates, they find effects very similar to NAFTA’s.
The mortality effects of declining manufacturing employment differ starkly from those of employment declines during the Great Recession, the researchers note. Previous research from Finkelstein and Notowidigdo, along with MIT’s Frank Schilbach and McMaster University’s Jonathan Zhang, finds that when people lost jobs during and in the wake of the Great Recession, mortality rates decreased.
But those job losses predominantly occurred outside of manufacturing. When Finkelstein, Notowidigdo, and Shi reanalyzed Great Recession data but differentiated commuting zones based on the share of job losses that came from manufacturing, they find that decreases in manufacturing employment raised mortality rates, while other drops in employment had the opposite effect.
Collectively, the findings suggest that how and how drastically future economic shocks affect mortality rates “likely depends critically on the extent to which employment declines are concentrated in the manufacturing sector,” write Finkelstein, Notowidigdo, and Shi.
- Amy Finkelstein, Matthew J. Notowidigdo, and Steven Shi, “Trading Goods for Lives: NAFTA’s Mortality Impacts and Implications,” Working paper, March 2026.
- Amy Finkelstein, Matthew J. Notowidigdo, Frank Schilbach, and Jonathan Zhang, “Lives Versus Livelihoods: The Impact of the Great Recession on Mortality and Welfare,” Quarterly Journal of Economics, August 2025.
- Shushanik Hakobyan and John McLaren, “Looking for Local Labor Market Effects of NAFTA,” Review of Economics and Statistics, October 2016.
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