ESSAYS ON GLOBALISATION: EFFECTS AND IMPLICATIONS FOR INDIVIDUALS

This thesis studies the effects of import competition from China and Eastern Europe on the health and fertility decisions of German individuals working in manufacturing. Individuals are matched with separate measures of exposure to competition from China and Eastern Europe, respectively. To isolate exogenous supply shocks from the origin, instrumental variables for competition from each of China and Eastern Europe are constructed. Results in Chapter 1 suggest that higher import competition worsens individual health via job displacement, wage decline, shortened employment duration, increased reliance on welfare and less future orientation, with Chinese import competition affecting individuals twice as much. Health declines as individuals increase their visits to the doctor, exercise less frequently and have a higher probability of developing chronic illness. Also, there is some evidence that individuals do not tend to become disabled but may be slowly pushed into chronic illness. Findings in Chapter 2 show that import competition negatively affects the individual’s probability of having children via reduced earnings, lower satisfaction with personal income and shortened employment duration. The chapter then investigates effects of import exposure by gender. Results show that male and female fertility choices differ upon rising import competition. Higher import exposure lowers female earnings and job autonomy, which in turn generates a lower opportunity cost of work, to the point where having children would become a more rewarding alternative for female workers. By contrast, increased import exposure negatively affects male workers’ fertility through reduced earnings and employment duration.