When Chinese competition endangers health
The debate on how international trade, fostered by globalization, has affected developed countries usually revolves around labor-related outcomes, such as unemployment and salary reductions. There is however another hidden cost of import competition that is rarely discussed: the impact on workers' health. In Trade-Induced Mortality, Jérôme Adda (Department of Economics) and Yarine Fawaz looked at the impact of Chinese import competition on different causes of mortality in Italy and the US. Both countries experienced a huge increase of imports from China over the last two decades. The resulting decrease in employment in the manufacturing sector could have had an effect on workers' death rate through mechanisms such as mental health conditions increasing the risk of suicide; drinking and smoking causing cirrhosis, tobacco-induced cancer and other diseases; the increase of commuting causing more motor accidents; and, in the U.S., the loss of health insurance.
To verify if the trade shock affected workers' health, Adda and Fawaz used individual mortality data and linked them to trade series over the past twenty-plus years. They found out that an increase in import competition from China raises the probability of dying in both countries. The effect become manifest four to six years after the trade shock. In the US, the causes of death are suicide, cirrhosis, and respiratory diseases. In Italy, there is a stronger effect on small firm managers than on blue collar workers. A billion dollar increase in imports leads to about 2% increase in manufacture workers' mortality in the US and 7% in Italy. It means 330 and 250 extra deaths per year per billion USD imports, respectively.
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