PURCE An architectural rendering of the Purdue University Research Center in Economics, which will soon have a new home in the Krannert Building. (Image provided)

Real-world research

The ongoing uncertainty regarding health care policy is among a growing list of real-world research efforts at PURCE.

According to a working paper by Krannert economics professors Chong Xiang and David Hummels, however, at least one fact proves certain: 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 and issued by the National Bureau of Economic Research (NBER), 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.

Another PURCE faculty member focusing on health care is Trevor Gallen, an assistant professor of economics, whose working papers include “Wedges, Wages and Productivity Under the Affordable Care Act” and “Using Participant Behavior to Measure the Value of Social Programs: The Case of Medicaid.”

Other PURCE research spans a variety of policy topics, including assistant economics professor Jillian Carr’s work on juvenile curfews and gun violence, and assistant economics professor Joe Mazur’s investigation into bankruptcy law and firm investment. Distinguished Professor of Economics Tim Cason, the Robert and Susan Gadomski Chair in Economics, is examining how tradeable emissions permits to reduce pollution might affect investment decisions, while Xiang is in the early stages of another research project that measures the quality of various countries’ educational systems.

“We look at data and are interested in how the world actually operates," Umbeck says. "Our view within PURCE is that economics is about people and their behavior, not about things. And there aren’t many things more fun than watching people.”

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