International Trade and Wellbeing

Controlling for their macroeconomic effects, increased international competition (exports and imports) is detrimental to national subjective well-being.

  •  Professor Richard  EasterlinProfessor Richard Easterlin
    Neither agree nor disagree
    Too remote from what matters for happiness.

  •  Professor Heinz  WelschProfessor Heinz Welsch
    Agree
    Increased international competition is just one aspect of increased market competition more generally. The famous assertion of J.R. Hicks (1935) "The best of all monopoly profits is a quiet life" would suggest that increased market competition is indeed detrimental to people's well-being (controlling for favorable economic effects). There is surprisingly little research concerning this idea. One exception is a paper by Yen and Benham (1986) which found that the life expectancy of U.S. executives in regulated industries is higher than that of their counterparts in unregulated industries, presumably due to differences in the stressfulness of the respective work environments. A Google research yields surprisingly few citations or follow-up studies. I think this area is seriously underresearched, given the great importance of the issue. Of particular interest would be whether such effects apply not just to executives but to the work environment more generally. Intuitively, I tend to lean towards the assertion in the survey.

  •  Professor Leonardo  BechettiProfessor Leonardo Bechetti
    Disagree
    International competition can raise wellbeing provided that trade openness is accompanied by rules of minimal requirement on social and environmental sustainability and on health rules. More trade competition without these rules reduces wellbeing in countries with higher social, environmental and health regulation while it increases it in the opposite case

  •  Professor Martin  BinderProfessor Martin Binder
    Neither agree nor disagree
    .

  •  Doctor Daniel  BenjaminDoctor Daniel Benjamin
    Neither agree nor disagree
    The effects on national consumption are ambiguous; on the one hand, greater competition increases total (worldwide) production and consumption, but national citizens' incomes could fall by a large enough amount that their own consumption falls. Typically I would expect average consumption to increase worldwide (although the gains may not be equal across countries). But even so, there are likely to be winners and losers within the country, for example, many workers have been hurt by recent globalization. If national well-being puts higher weight on the worse off, then national well-being could fall even if average well-being rises. In addition, there may be political backlash against the distributional effects of globalization (as appears to be happening now), further complicating the calculus. Nonetheless, there may be ways to manage increased international competition to minimize adverse distributional effects.

  •  Professor Bruno  FreyProfessor Bruno Frey
    Completely disagree
    International competition enhances the opportunity space of consumers, and this raises happiness

  •  Professor Ruut  VeenhovenProfessor Ruut Veenhoven
    Disagree
    Increased international competition, is an aspect of 'globalization', which is on its turn part of wider 'modernization'. This long-term process involves winners and losers. So far, the winners outnumber the losers. (See Berg, M. & Veenhoven, R. (2013) Has modernization gone too far? Modernity and happiness in 141 contemporary nations, International Journal of Happiness and Development 1 (2) 172-195).

  •  Professor Ori  HeffetzProfessor Ori Heffetz
    Neither agree nor disagree
    Do we have any convincing causal evidence on this, in either direction? Notice also that in this sort of thing, comparisons of short-term effects versus long-term effects might be key. Which makes producing the relevant evidence still harder. I simply cannot see how at present we can make a causal statement in either direction.

  •  Professor Ada  Ferrer-i-CarbonnellProfessor Ada Ferrer-i-Carbonnell
    Neither agree nor disagree
    Subjective well-being is about perceptions and therefore the economic principle that trade openness and international competition is a win-win situation for all participants is not useful in answering this question. The very few empirical studies looking at the effect of openness to trade and globalization on happiness mostly conclude that the effect is negative although small. Most important, the effect seems to be heterogeneous across socio-economic groups and since it is not obvious how we should trade happiness across individuals, the answer to the question is uncertain. In addition, one wonders whether the existing empirical evidence can isolate the effect of international competition or openness to trade on happiness from the effect of other variables intrinsically correlated with openness, such as internationalization of personal relations or openness to cultural differences.

  •  Professor Alois  StutzerProfessor Alois Stutzer
    Disagree
    International competition limits the rent seeking of domestic special interests.

  •  Doctor Esteban  CalvoDoctor Esteban Calvo
    Disagree
    I would argue that the direction of the effect is shaped by levels of economic inequality and types of cultural values. Increased international competition may be detrimental to subjective well-being when unequal economies are combined with local oriented values, but they may be beneficial in the context of highly equal economies and highly globalized cultures.

  •  Professor Jan  DelheyProfessor Jan Delhey
    Neither agree nor disagree
    The true question is: for whom is increased international competition detrimental to subjective well-being? While it is perfectly possible that more international competition is benefitial to the upper strata, lower strata might be prone to be negatively affected in their subjective well-being. This is particularly the case if a weak welfare state does little to protect those segments of the workforce which might become "superflous" by increased international competition.

  •  Professor Arie  KapteynProfessor Arie Kapteyn
    Completely disagree
    In itself competition is irrelevant; it all depends on what a government does to mitigate the effects it may have on individual workers

  •  Professor Paul  FrijtersProfessor Paul Frijters
    Agree
    Those regions in the US that had more employment in sectors at risk of competition from imports in the 00's had much higher levels of mental health problems (Lang et al. 2006). Similarly, in Germany in 1995-2006, workers in sectors with more off-shoring were significantly more anxious, particularly higher skilled workers with more to lose from job loss (Geischecker et al. 2012). So whilst I do not know of negative effects of exports, there is now growing recent evidence that in Western countries growing imports are associated with increased anxiety and worse mental health. If we thus discount the macro-economic benefits of more competition, the anxiety channel remains. Lang, Matthew and McManus, T. Clay and Schaur, Georg, The Effects of Import Competition on Health in the Local Economy (March 30, 2016). Geishecker, Ingo, Maximilian Riedl, and Paul Frijters. "Offshoring and job loss fears: An econometric analysis of individual perceptions." Labour Economics 19.5 (2012): 738-747.

  •  Professor John  HelliwellProfessor John Helliwell
    Neither agree nor disagree
    In Globalization and Well-Being I presented evidence showing that globalization presents both opportunities and threats to subjective well-being, and that individuals, communities and nations retain more more freedom of action to support their own happiness than is argued by either the proponents or opponents of globalization.





Controlling for their macroeconomic effects, increased openness to trade (exports and imports) is detrimental to national subjective well-being.

  •  Professor Richard  EasterlinProfessor Richard Easterlin
    Neither agree nor disagree
    same comment.

  •  Professor Heinz  WelschProfessor Heinz Welsch
    Agree
    Increased openness to trade (exports and imports) naturally implies increased competition on both domestic and international markets. Hence, the well-being effects should be very similar to those in statement No. 1, and the evidence is similarly scarce. A more far-reaching question would concern the net effect of increased international competition and trade openness: Is better macroeconomic performance and availability of goods - whose favorable wellbeing effects are relatively uncontroversial - worth the extra stressfulness of (work) life?

  •  Professor Leonardo  BechettiProfessor Leonardo Bechetti
    Disagree
    Same comments of before applies

  •  Professor Martin  BinderProfessor Martin Binder
    Neither agree nor disagree
    .

  •  Doctor Daniel  BenjaminDoctor Daniel Benjamin
    Neither agree nor disagree
    Increased openness to trade is likely to led to increased international competition, as per the previous question.

  •  Professor Bruno  FreyProfessor Bruno Frey
    Completely disagree
    Same answer as before

  •  Professor Ruut  VeenhovenProfessor Ruut Veenhoven
    Disagree
    People live happier in open economies. That effect disappears largely when macro-economic factors (such as GDP) are controled, but does not turn negative. See http://worlddatabaseofhappiness.eur.nl/hap_cor/desc_sub.php?sid=5812

  •  Professor Ori  HeffetzProfessor Ori Heffetz
    Neither agree nor disagree
    There are probably losers and winners (within a country), short-run versus long-run, North versus South (between countries). I believe that we are only beginning to scratch the surface, looking for the relevant evidence. Again, I think that we are still far from being able to provide a responsible answer. (I took the "controlling for their macro effects" to mean that I should only think about jobs and consumer choice, but maybe jobs are macro too? The question is pretty hard to interpret.)

  •  Professor Ada  Ferrer-i-CarbonnellProfessor Ada Ferrer-i-Carbonnell
    Neither agree nor disagree
    Current evidence seems to indicate that openness to trade is negatively correlated with happiness (Di Tella and MacCulloch, 2008, JDE; and Dluhosch and Horgos, 2013, Soc Indic Res), although the coefficient is often small. In contrast with this finding, however, evidence suggests that a lower degree of trade restrictions (controlling for actual trade) correlates positively with life satisfaction (Dluhosch and Horgos , 2013, Soc Indic Res; Khun, Lahiri, and Lim, 2015, The Journal of International Trade & Economic Development).

  •  Professor Alois  StutzerProfessor Alois Stutzer
    Disagree
    International competition limits the rent seeking of domestic special interests.

  •  Doctor Esteban  CalvoDoctor Esteban Calvo
    Disagree
    Similarly to my previous answer, I would argue that the direction of the effect is shaped by levels of economic inequality and types of cultural values. Increased openness to trade may be detrimental to subjective well-being when unequal economies are combined with local oriented cultures, but may be beneficial in the context of highly equal economies and highly globalized cultures.

  •  Professor Jan  DelheyProfessor Jan Delhey
    Neither agree nor disagree
    he true question is: for whom is increased openness to trade detrimental to subjective well-being? While it is perfectly possible that higher trade openness is benefitial to the upper strata, lower strata might be prone to be negatively affected in their subjective well-being. This is particularly the case if a weak welfare state does little to protect those segments of the workforce which might become "superflous" by increased trade across national borders.

  •  Professor Arie  KapteynProfessor Arie Kapteyn
    Completely disagree
    same as before

  •  Professor Paul  FrijtersProfessor Paul Frijters
    Disagree
    This is another question on which little is known empirically, but openness to trade has important benefits for the political system in a country in that it appears to strengthen the rule of law which itself supports more democratic institutions (Rigobon and Rodrick, 2005). The diffusion of ideas and social institutions is probably more important for well-being, but not well-researched. Still, openness to trade will generally come with more awareness of the social practises in other countries, which allows countries to adopt good ideas of others. An example of positive learning that has come from openness is, arguably, the widespread adoption of meditation into the West. So on balance, openness is probably good for long-run well-being despite the anxiety effect of competition from import markets. Rigobon, Roberto, and Dani Rodrik. "Rule of law, democracy, openness, and income." Economics of transition 13.3 (2005): 533-564.

  •  Professor John  HelliwellProfessor John Helliwell
    Neither agree nor disagree
    same as previous response