Working Paper: CEPR ID: DP10874
Authors: Italo Colantone; Rosario Crin; 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.
Keywords: individual-level; panel data; subjective wellbeing; trade adjustment costs
JEL Codes: F1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Import Competition (L13) | Mental Distress (I31) |
| Import Competition (L13) | Job Displacement (J63) |
| Import Competition (L13) | Lower Wage Growth (J31) |
| Job Displacement + Lower Wage Growth (J63) | Mental Distress (I31) |
| Import Competition (L13) | Job Stress (J28) |
| Job Stress (J28) | Mental Distress (I31) |
| Deteriorating Future Expectations (D84) | Mental Distress (I31) |