Deindustrialisation, Foreign Investment and Social Development: Mortality in the Hungarian Rustbelt

Abstract

Abstract Background Many nations are experiencing deindustrialisation. A common strategy to cope with this is encouraging foreign investment. We still know little about the health impact of such industrial transformations, especially their role in the postsocialist mortality crisis. Methods Utilising a novel dataset constructed over two years covering 52 towns, 550 companies and 42,800 subjects, using multilevel survival modelling I test how deindustrialisation and foreign investment affect mortality in medium-sized towns in Hungary. I group towns into severely, and moderately deindustrialised (1989-1995), and into state ownership, domestic private and foreign ownership dominated categories (1995-2004). A retrospective cohort study in these towns collected data on vital status of respondents. I use multiple robustness checks and sensitivity analyses to reduce selection bias and endogeneity. Findings Deindustrialisation is associated with significantly higher odds of mortality for men between 1989 and 1995 (OR = 1. 16; p < 0.01). Foreign investment was not associated with mortality in any of the models for the 1989-1995 period. Between 1995 and 2004, women living in towns dominated by state ownership had a significantly lower risk of mortality compared to those living in towns dominated by foreign investment (OR = 0.79; p < 0.05) or domestic private ownership (OR = 0.74; p < 0.01). Foreign investment was associated with higher income growth in both periods; however, this was not associated with better health results. Conclusions Severe deindustrialisation was a crucial factor behind the post-socialist mortality crisis for men. The indirect economic benefits of foreign investment do not translate automatically into better health; in fact, women living in towns dominated by foreign investors appear to have a higher risk of dying. Foreign investment might promote economic growth but in itself cannot mitigate the health impact of severe deindustrialisation. Key messages Deindustrialisation is a significant contextual health risk factor. Spontaneous market processes, such as foreign investment, do not automatically reduce the detrimental health effect of plant closures.