The Hidden Cost of Globalization: Import Competition and Mental Distress

39 Pages Posted: 26 Sep 2015

See all articles by Italo Colantone

Italo Colantone

Bocconi University

Rosario Crinò

Catholic University of Milan

Laura Ogliari

Bocconi University

Multiple version iconThere are 2 versions of this paper

Date Written: September 2015

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

JEL Classification: F1

Suggested Citation

Colantone, Italo and Crinò, Rosario and Ogliari, Laura, The Hidden Cost of Globalization: Import Competition and Mental Distress (September 2015). BAFFI CAREFIN Centre Research Paper No. 2015-11. Available at SSRN: https://ssrn.com/abstract=2665600 or http://dx.doi.org/10.2139/ssrn.2665600

Italo Colantone (Contact Author)

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

Rosario Crinò

Catholic University of Milan ( email )

1 Largo A. Gemelli
Milano (Milan), MI Milano 20123
Italy

Laura Ogliari

Bocconi University ( email )

Via Sarfatti, 25
Milan, 20136
Italy

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