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The Hidden Cost of Globalization: Import Competition and Mental Distress

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  • Italo Colantone
  • Rosario Crinò
  • Laura Ogliari

Abstract

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 2001-2007. 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.

Suggested Citation

  • Italo Colantone & Rosario Crinò & Laura Ogliari, 2015. "The Hidden Cost of Globalization: Import Competition and Mental Distress," BAFFI CAREFIN Working Papers 1511, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    • Handle: RePEc:baf:cbafwp:cbafwp1511
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    Cited by:

    1. Chiara Carboni & Elisabetta Iossa & Gianpiero Mattera, 2017. "Barriers to Public Procurement: A Review and Recent Patterns in the EU," IEFE Working Papers 92, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    2. Colantone, Italo & Crinò, Rosario & Ogliari, Laura, 2019. "Globalization and mental distress," Journal of International Economics, Elsevier, vol. 119(C), pages 181-207.
    3. Cevat G. Aksoy & Sergei Guriev & Daniel S. Treisman, 2018. "Globalization, Government Popularity, and the Great Skill Divide," NBER Working Papers 25062, National Bureau of Economic Research, Inc.
    4. Italo Colantone & Alessia Matano & Paolo Naticchioni, 2020. "New imported inputs, wages and worker mobility," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 29(2), pages 423-457.
    5. Clément Malgouyres, 2017. "Trade Shocks and Far-Right Voting: Evidence from French Presidential Elections," RSCAS Working Papers 2017/21, European University Institute.
    6. Jonathan de Quidt & Johannes Haushofer, 2016. "Depression for Economists," NBER Working Papers 22973, National Bureau of Economic Research, Inc.
    7. Grossmann, Volker & Strulik, Holger, 2021. "Illicit drugs and the decline of the middle class," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 718-743.
    8. Italo Colantone & Piero Stanig, 2017. "The Trade Origins of Economic Nationalism: Import Competition and Voting Behavior in Western Europe," BAFFI CAREFIN Working Papers 1749, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    9. Barbara Dluhosch & Daniel Horgos, 2019. "International Competition Intensified: Job Satisfaction Sacrificed?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(2), pages 479-504, June.
    10. Gu, Grace Weishi & Malik, Samreen & Pozzoli, Dario & Rocha, Vera, 2016. "Trade Induced Skill Upgrading: Lessons from the Danish and Portuguese Experiences," IZA Discussion Papers 10035, Institute of Labor Economics (IZA).
    11. Hummels, David & Munch, Jakob R. & Xiang, Chong, 2016. "No Pain, No Gain: The Effects of Exports on Effort, Injury, and Illness," IZA Discussion Papers 10036, Institute of Labor Economics (IZA).
    12. Matthieu Crozet & Laura Hering & Sandra Poncet, 2018. "Looking for the Bright Side of the China Syndrome: Rising Export Opportunities and Life Satisfaction in China," Working Papers 2018-14, CEPII research center.
    13. Jonathan D. Ostry & Andrew Berg & Siddharth Kothari, 2021. "Growth‐equity trade‐offs in structural reforms," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(2), pages 209-237, May.
    14. Jonathan de Quidt & Johannes Haushofer, 2017. "Depression through the Lens of Economics: A Research Agenda," NBER Chapters, in: The Economics of Poverty Traps, pages 127-152, National Bureau of Economic Research, Inc.
    15. Luca Salvatici & Silvia Nenci, 2017. "New features, forgotten costs and counterfactual gains of the international trading system," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(4), pages 592-633.
    16. David Hummels & Jakob Munch & Chong Xiang, 2016. "No Pain, No Gain: Work Demand, Work Effort, and Worker Health," NBER Working Papers 22365, National Bureau of Economic Research, Inc.
    17. Chiara Carboni & Elisabetta Iossa & Gianpiero Mattera, 2018. "Barriers towards foreign firms in international public procurement markets: a review," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(1), pages 85-107, March.
    18. Faqin Lin & Xiaosong Wang & Mohan Zhou, 2022. "How trade affects pandemics? Evidence from severe acute respiratory syndromes in 2003," The World Economy, Wiley Blackwell, vol. 45(7), pages 2270-2283, July.
    19. Italo Colantone & Piero Stanig, 2016. "Global Competition and Brexit," BAFFI CAREFIN Working Papers 1644, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.

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    More about this item

    Keywords

    Subjective well-being; trade adjustment costs; individual-level panel data;
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    JEL classification:

    • F1 - International Economics - - Trade

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