Long‐term Effect of Export Expansion on Human Capital

This paper illustrates how trade liberalization during an individual's early life can affect long‐term health and cognitive outcomes 15 years later (i.e., in adolescence). China's accession to the World Trade Organization has brought significant economic benefits but has also given rise to...

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Bibliographic Details
Published in:China & world economy 2024-11, Vol.32 (6), p.1-34
Main Author: Fu, Jintao
Format: Article
Language:English
Subjects:
Child development
Economic status
Expansion
Export expansion
health and cognitive
Health status
Households
Human capital
International trade
Pollution
Trade liberalization
trade‐induced pollution
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Summary:This paper illustrates how trade liberalization during an individual's early life can affect long‐term health and cognitive outcomes 15 years later (i.e., in adolescence). China's accession to the World Trade Organization has brought significant economic benefits but has also given rise to some environmental concerns. Exploiting variations in each prefecture's exposure to trade shock and trade‐induced pollution shock, this study constructed a shift‐share instrument variable model. The trade shocks in early life improved health and cognitive outcomes significantly during adolescence while trade‐induced pollution shock had the opposite effect, decreasing these two outcomes. These impacts were more pronounced among households with low economic status. Further investigation provided evidence for several underlying mechanisms, such as improved health and education resources and reduced SO2 emissions by firms. This study provides useful insights into how to evaluate the long‐term effects of trade liberalization on human capital in terms of economic benefits and environmental costs in China.
ISSN:1671-2234
1749-124X
DOI:10.1111/cwe.12556