Import penetration and workplace safety

Abstract

We examine how import penetration from China affects corporate workplace safety in U.S. manufacturing firms. Using Chinese import penetration to other eight developed countries as an instrument, we find that import penetration to the U.S. worsens worker safety. We identify two underlying economic mechanisms through which import penetration impairs workplace safety—resource constraints for safety-related investments and reduced employee safety compliance due to heightened job insecurity among U.S. workers. Finally, we find that the negative effect of import competition on worker safety is attenuated in firms that experience heightened product differentiation and market concentration, stronger union bargaining power, and higher level of social capital.