Chicago Booth study finds tariffs shift wealth from service workers to tradable sectors
Researchers at the University of Chicago Booth School of Business analyzed U.S. data from 2017 to 2019 to determine how tariffs redistribute money between different groups of employees.
Study treats tariffs as wealth transfer
The research team led by Professor Rodrigo Adão views trade barriers as a mechanism for moving financial resources rather than just a policy tool. They examined transactions across 21 industries with tradable products alongside the services sector which acts as a benchmark. The analysis covered all 50 states and the District of Columbia using data from three years.
Services workers lose to tradable sectors
Quotes from Professor Adão indicate that tariffs result in monetary transfers from people employed in services to those working in tradable industries. The variation in tariff rates across different goods creates larger or smaller financial gains for workers in specific tradable sectors. Researchers validated their theoretical model using real transaction data to confirm these findings.
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