Globalisation and Declining Individual Health

Despite costly labour-market adjustments due to increased international trade over the last two decades, the health effects of trade liberalisation are underexplored, with potentially wide implications for public policy and national budgets. Given the remarkable increase in trade volumes between Germany and China, this paper studies the effects of Chinese import competition on the health outcomes of individuals working in German agri-food. Individual general health is investigated over 22 years by combining multiple data sources into a unique dataset that computes import exposure and links it with longitudinal data on individuals from the German Socio-Economic Panel. Instrumental variable fixed-effects estimates show that higher import competition from China worsens individual health via several mechanisms that are related mainly to the labour market and reliance on welfare. This could have deeper and long-lasting implications for the German national budget and calls for an accountable design of future welfare support schemes and employee protection policies for working individuals in a globalising world.