Globalization and mental distress

Abstract

We study the effects of import competition on workers' mental distress, using unique longitudinal data on mental health for British residents, coupled with measures of import competition in more than 100 industries over 1995-2007. We find that import competition has a large negative impact on individual mental health. Compared to a worker employed in the industry at the 25th percentile of the import competition distribution, a worker employed in the industry at the 75th percentile would need a yearly monetary compensation of £270 to make up for her greater utility loss. We find import competition to have larger effects on the right tail of the mental distress distribution, thereby increasing inequality in mental health not only across but also within industries. We show that this is consistent with import competition disproportionately hitting specific groups of workers in an industry, such as the youngest or those with a large family, a poor financial condition, a short job tenure, a temporary contract, and a bluecollar or tradable job. Using information on family ties, we find that import competition has negative spillovers to other family members. In particular, women's mental distress increases as a consequence of the import competition faced by their partners. Moreover, paternal import competition leads to reduced investment in child rearing and worsened children's self-esteem and life satisfaction. Finally, we provide evidence that import competition is likely to work through a complex set of channels. These include observable labor market outcomes such as higher likelihood of job displacement and lower wage growth, but also reduced job satisfaction and gloomier expectations about the future.

Family Ruptures, Stress, and the Mental Health of the Next Generation

“…For each occasion when a prescription drug was bought, the data contain detailed information about the drug name, active substance, average daily dose, and the drug's exact ATC code. 19 The ATC classification allows us to link the drugs to the conditions they are most commonly used to treat.…”

“…Second, although our primary focus is mental health, we prespecified a small set of physical health conditions that have been linked to stress in utero or after birth in the epidemiological and medical literature: type II diabetes, heart disease, Cushing's syndrome, hypo-and hyperthyroidism, cholesterol, neoplasms, and conditions originating in the perinatal period. 21 We include all of these for completeness, although 19 The Anatomical Therapeutic Chemical (ATC) Classification System is controlled by the World Health Organization Collaborating Centre for Drug Statistics Methodology (WHOCC), and was first published in 1976. 20 We have access only to the subset of the inpatient and prescription drug records described here, not to the entire universe of inpatient and prescription drug records for all possible conditions.…”

Alternative Sources of the Gains from International Trade: Variety, Creative Destruction, and Markups

“…After making some assumptions-for example, that profits are zero due to free entry so that consumer gains from trade are equal to the social gains-one can invert the change in the cost-of-living index to obtain an expression for the welfare gain from the new products. 3 Suppose that we compare two different equilibria of the home economy with different amounts of imports. Let the variable λ denote the share of home spending on its domestic products in the first equilibrium, and let λ′ denote this share in the second equilibrium.…”

“…Ossa also takes into account nontraded goods (which lowers the measured gains from trade) and interindustry flows of intermediate inputs (which raises the measured gains). 3 Some other relevant assumptions are that labor is the only factor of production and that marginal labor costs are fixed. Normalizing the wage at unity and with constant markups due to the constant elasticity of demand, it follows that prices are also fixed.…”

Economic Shocks and Crime: Evidence from the Brazilian Trade Liberalization

“…Third, we contribute to a recent but growing literature stressing adjustment costs to trade shocks beyond those associated with the labor market. 5 The fact that crime has an important externality dimension adds particular interest to this point, since it means that the socioeconomic implications of trade shocks go beyond the costs and benefits incurred by the individuals directly affected by them. Of particular interest to our paper, Che and Xu (2016) and Deiana (2016) exploit labor demand shocks across American Commuting Zones induced by import competition from China to show that regions more exposed to China trade experience relative increases in property crime.…”