Killer Jobs

Monday, September 26, 2016

It may seem obvious to those who suffer the most, but a working paper issued by the National Bureau of Economic Research by Krannert economics professors Chong Xiang and David Hummels provides confirmation: Employees under prolonged workplace pressures face serious consequences to their health.The paper, "No Pain, No Gain: The Effects of Exports on Effort, Injury, and Illness," coauthored by Jakob Munch of the University of Copenhagen, focuses on the Danish manufacturing sector. The research trio chose Denmark because of its similarities to the U.S. labor market and its universal health care system, which provides access to data on doctor visits, prescription drug use, hospitalization, sick days and job injuries.

The researchers take advantage of economic shocks originating outside of Denmark that represent unexpected changes in overseas demands for Danish exports during the period 1996 to 2006. Since these shocks were beyond the control of individual workers and their employers in the Danish manufacturing sector, the study established a causal relationship between changes in product demand on the one hand, and workload and employees’ health on the other.

"Increased job effort can raise productivity and income, but it also puts workers at increased risk of illness and injury," Xiang says.

Beyond showing that rising exports led to longer work hours, higher work intensity, and higher injury and sickness rates, the findings also revealed key differences in how men and women respond to workplace stress. A 10 percent rise in exports, for example, increased women's rates of injury by 6 percent, severe depression by 2.5 percent, and heart attacks or strokes by 15 percent.

The researchers also discovered unique patterns involving sick days. At most companies, employees began taking fewer sick days after business increased, which suggests they felt pressured to come to work even if they weren’t feeling well.

Xiang says the findings reflect the importance of providing employees with services to help them manage and reduce work-related stress, from connecting workers to psychiatrists to creating a more soothing work environment.

In many cases, the first and best approach to dealing with workplace stress is to simply open a dialogue. "In our culture we don't seem very comfortable talking about personal health issues, particularly mental health," Xiang says. "As a society, we can support each other better if we're more open about such conversations."

An abstract and downloadable PDF of "No Pain, No Gain: The Effects of Exports on Effort, Injury, and Illness," is available at https://www.nber.org/papers/w22365

Contributors: David Hummels, Dean and Professor of Economics, Purdue University Krannert School of Management; Jakob Munch, Professor of Economics, University of Copenhagen; Chong Xiang, Professor of Economics, Purdue University Krannert School of Management.