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The hidden cost of trade liberalization: Input tariff shocks and worker health in China

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  • Fan, Haichao
  • Lin, Faqin
  • Lin, Shu

Abstract

This study examines the health effect of input tariff reductions on Chinese manufacturing workers and its heterogeneity across skill levels. We first provide a simple model to demonstrate the mechanisms. We then put the predictions of the model into a test using the China Health and Nutrition Survey data. Exploiting prefecture variations in input tariff shocks, we find that input tariff reductions following China's WTO accession adversely affect worker health through increased working hours. Moreover, input tariff reductions widen both the income and the health gaps between skilled and unskilled workers. Further welfare analysis indicates that ignoring health outcomes would substantially underestimate the welfare disparity between skilled and unskilled workers.

Suggested Citation

  • Fan, Haichao & Lin, Faqin & Lin, Shu, 2020. "The hidden cost of trade liberalization: Input tariff shocks and worker health in China," Journal of International Economics, Elsevier, vol. 126(C).
    • Handle: RePEc:eee:inecon:v:126:y:2020:i:c:s0022199620300659
    DOI: 10.1016/j.jinteco.2020.103349
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    More about this item

    Keywords

    Input tariff; Trade liberalization; Health; Welfare disparity; China;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • I1 - Health, Education, and Welfare - - Health
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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