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Globalization and mental distress

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  • Colantone, Italo
  • Crinò, Rosario
  • Ogliari, Laura

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 blue-collar 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.

Suggested Citation

  • Colantone, Italo & Crinò, Rosario & Ogliari, Laura, 2019. "Globalization and mental distress," Journal of International Economics, Elsevier, vol. 119(C), pages 181-207.
  • Handle: RePEc:eee:inecon:v:119:y:2019:i:c:p:181-207
    DOI: 10.1016/j.jinteco.2019.04.008
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    2. Giuntella, Osea & Rieger, Matthias & Rotunno, Lorenzo, 2020. "Weight gains from trade in foods: Evidence from Mexico," Journal of International Economics, Elsevier, vol. 122(C).
    3. Rania Gihleb & Osea Giuntella & Luca Stella & Tianyi Wang, 2020. "Industrial Robots, Workers’ Safety, and Health," SOEPpapers on Multidisciplinary Panel Data Research 1107, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Italo Colantone & Alessia Matano & Paolo Naticchioni, 2018. "“New Imported Inputs, Wages and Worker Mobility”," AQR Working Papers 201804, University of Barcelona, Regional Quantitative Analysis Group, revised Apr 2018.
    5. 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.
    6. 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.
    7. Gihleb, Rania & Giuntella, Osea & Stella, Luca & Wang, Tianyi, 2020. "Industrial Robots, Workers' Safety, and Health," IZA Discussion Papers 13672, Institute of Labor Economics (IZA).
    8. Marine Coupaud, 2020. "The mediating role of working conditions in the analysis of the links between offshoring and health of European workers," Economics Bulletin, AccessEcon, vol. 40(2), pages 1522-1537.
    9. Antonia Lopez Villavicencio & Maria Cervini, 2019. "The mental health consequences of globalisation," EconomiX Working Papers 2019-26, University of Paris Nanterre, EconomiX.
    10. Carol Graham, 2005. "The Economics of Happiness," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 6(3), pages 41-55, July.

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    Keywords

    Mental health; Import competition; Individual-level panel data;
    All these keywords.

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    • F1 - International Economics - - Trade

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