The Hidden Cost of Globalization: Import Competition and Mental Distress

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We study the effect of import competition on workers' mental distress. To this purpose, we source information on the mental health of British workers from the British Household Panel Survey, and combine it with measures of import competition in more than 100 industries over [2001][2002][2003][2004][2005][2006][2007]. We find an increase in import competition to have a positive, statistically significant, and large impact on mental distress. The effect is strikingly robust to controlling for a wide range of individual, household, and industry characteristics. We show that part of the effect is due to import competition worsening the current labor market situation of individuals, in terms of higher probability of job displacement and lower wage growth. Additionally, and most importantly, we show that import competition worsens mental health also for individuals witnessing no change in observable labor market conditions, by increasing stress on the job and worsening expectations about the future. JEL-Codes: F100. Terms of use: Documents in

The Trade Origins of Economic Nationalism: Import Competition and Voting Behavior in Western Europe

“…Several studies have shown that import competition implies significant adjustment costs in terms of job displacement and reduced earnings (e.g., Acemoglu et al. ; Autor, Dorn, and Hanson ), and poorer physical and mental health for exposed workers (Colantone, Crinò, and Ogliari ; Hummels, Munch, and Xiang ).…”

“…Motivated by earlier literature (e.g., Autor, Dorn, and Hanson ; Autor et al. ; Colantone, Crinò, and Ogliari ), this instrument is meant to capture the variation in Chinese imports due to exogenous changes in supply conditions in China, rather than to domestic factors that could be correlated with electoral outcomes.…”

New Imported Inputs, Wages and Worker Mobility

“…This instrument is meant to isolate variation in new imported inputs in Italy which is due to exogenous changes in supply conditions in the origin countries, and not to domestic specific shocks which might be endogenous to wages and worker mobility. This IV approach is similar in spirit to the one originally proposed by Autor et al (2013) for instrumenting US imports from China, and has been employed in several other studies (e.g., Dauth et al, 2014;Hummels et al, 2014;Bloom et al, 2016;Colantone et al, 2015). In the empirical section, we discuss possible concerns with the exclusion restriction underlying our IV strategy, and we present a large number of robustness checks corroborating our main findings.…”

“…Finally, we compute the average entry rate of new imported inputs across the 24 countries, for each industry and year. Inspired by earlier studies in the empirical trade literature (Autor et al, 2013;Dauth et al, 2014;Hummels et al, 2014;Bloom et al, 2016;Colantone et al, 2015), this instrument is meant to capture the variation in the arrival of new imported inputs that is driven by changes in supply conditions in foreign countries, and not by domes-4 tic industry-specific shocks in Italy, which might be endogenous to wage growth and worker mobility. Our results are robust to a large number of robustness checks on the IV-strategy, including controls for industry-specific contemporaneous shocks and underlying trends.…”

Trade‐induced Skill Polarization

“…First, we re-estimate Equations (8) and (9) by including in the sample only workers from one of the following age groups: (1) young workers, that is, 23. Following Colantone, Crino, and Ogliari (2015), these industries are the manufacture of coke, refined petroleum products and nuclear fuel (NACE 23), the manufacture of rubber and plastic products (NACE 25), the manufacture of radio, television and communication equipment and apparatuses (NACE 32), air transportation (NACE 62), and post and telecommunications (NACE 64).…”