No Pain, No Gain: The Effects of Exports on Job Injury and Sickness

We live in a century of globalization and rising expenditures on health, but little rigorous research has been done to understand the impacts of globalization on individuals’ health. We combine Danish data on individuals’ health with Danish matched worker-firm data to understand how increases in exports by firms affect their employees’ job injuries and sickness during 1995-2006. We find that rising exports lead to higher rates of injury and sickness, mainly for women. A 10% exogenous increase in exports increases women’s chance of severe job injury by 6.35%, severe depression, 2.51%, using antithrombotic drugs, 7.70%, and hospitalizations due to heart attacks or strokes, 17.44%. Rising exports also lead to higher work efforts by both men and women: less minor sick-leave days and more total hours (regular plus over-time). During the 2007-2009 recession, Danish exports and on-the-job injuries fell significantly. An out-of-sample prediction using our estimates accounts for 12%- 62% of the actual decrease in job injury counts in this period. Finally, we develop a framework to calculate the contemporaneous welfare losses due to higher rates of multiple types of injury and sickness, and show that for the average male and female worker, the welfare loss from the adverse health outcomes is substantial but small relative to the wage gains from rising exports (4.16% for men but 18.83% for women).