The effects of trade-induced worker displacement on health and mortality in Mexico

Recent research in the U.S. links trade-induced job displacement to deaths of despair. Should we expect the same mortality response in developing countries? This paper analyzes the effect of a trade-induced negative shock to manufacturing employment on leading causes of mortality in Mexico between 1998 and 2013. I exploit cross-municipality variation in trade exposure based on differences in industry specialization before China’s accession to the WTO in 2001 to identify labor-demand shocks that are concentrated in manufacturing. I find trade-induced job loss increased mortality from diabetes, raised obesity rates, reduced physical activity, and lowered access to health insurance. These deaths were offset by declines in mortality from ischemic heart disease and chronic pulmonary disease. These findings highlight that negative employment shocks have heterogeneous impacts on mortality in developing countries, where falling incomes lead to less access to health care and nutritious food, but also reduce alcohol and tobacco use.