By Arnold Kling
Bruce Bartlett surveys recent cost-benefit analysis.
In July, economist Martin N. Baily, chairman of the Council of Economic Advisers under President Clinton, looked at who benefits from outsourcing. He found that… on balance, the U.S. economy gains $1.12 to $1.14 for every $1 invested in outsourcing.
In August, economist Charles Schultze, chairman of the CEA under President Carter, looked at the number of jobs lost to outsourcing. He found that between the end of 2000 and the end of 2003, at most 215,000 jobs service sector jobs were lost.
… U.S. imports of computing services — the most controversial area of outsourcing — came to just 0.4 percent of the gross domestic product in 2003. China and India, the two countries most blamed for outsourcing, actually outsourced more than we do — 0.6 percent of GDP for the former and 2.4 percent of GDP for the latter.
For Discussion. Would the U.S. economy gain or lose jobs if outsourcing were curtailed?