29 April 2015

Globalizing Firms and Workers' Health: A Study Using Danish Matched Worker-Firm Data

Does globalization affects health? And if so, what are the effects? We will answer these questions by combining Danish data on individuals’ health with Danish matched worker-firm data. In one project we examine specific micro channels through which globalization affects job injuries and sickness. The results should inform us about how recession affects job injuries and the non-pecuniary welfare effects of globalization. In another project we examine the micro channels through which globalization affects individual workers’ health through displacement.

Denmark spends over 9% of GDP on health care, slightly more than the OECD average, and incurs substantial expenses: 3-4 billion DKK per year are directly tied to compensation for work-related accidents and illness. Research has shown that individuals’ health is often shaped by socio-economic conditions, that workers experience both pecuniary and non-pecuniary returns to work, and that changes in the economic environment may affect both wages and health outcomes. 

One profound change in Denmark’s economic environment is increased exposure to global competition. Between 1995 and 2006, Denmark more than doubled the value of its imports and the value of its exports with pronounced effects for wages and worker displacement. While a large literature examines how trade affects wages and other labor market outcomes,  very little research has examined whether globalization also affects health. We propose to fill in this gap.

Drawing on Danish matched worker-firm data, we observe individual Danish workers’ health outcomes and the firms that employ them, and we also observe these firms’ exposure to imports and exports. This allows us to study the micro channels through which shocks to globalizing firms affect their workers’ health.

Our approach will be unique in both the health economics and trade literatures. Relative to the former we explore a unique set of exogenous shocks that change the competitive environment of firms and gauge the health impact on their workers. Relative to the latter we uniquely focus on the potentially profound non-pecuniary effects of globalization on health.

Jakob Roland Munch is PI. The project will be carried out in close collaboration with David Hummels from Purdue University and Chong Xiang from Purdue University.

Contact: Jakob Roland Munch
Project period: August 2014 – July 2017