Recessions Affect Mortality — Just Not in the Way You Think

Over the last 25 years, research has challenged the conventional wisdom.

Many papers in empirical health economics report findings that aren’t all that surprising. Mandating more benefits makes health insurance more expensive; offering free health insurance to millions of people reduces the uninsured rate; raising tobacco taxes reduces smoking.

But occasionally a result comes along that’s tantalizingly counter-intuitive. Over the last 25 years, solid evidence has emerged showing that economic downturns in the U.S. tend to be accompanied by declines in mortality — such that, according to the leading scholar on the topic, Christopher Ruhm of the University of Virginia, the U.S. would have experienced 40,000 more deaths during the first year of the COVID-19 pandemic if the unemployment rate hadn’t gone up.

Another recent analysis concluded that “the Great Recession provided one in twenty 55-year-olds with an extra year of life.”

Let’s get something out of the way. People thrown out of work during recessions do not suddenly get healthier. In general, losing one's job has a very negative impact on health. One study estimated that “the health-damaging effect associated with being jobless is similar to the effect of about 10 extra years of age.”

So if recessions cause a lot of people to become unemployed, why don’t we see a substantial increase in mortality?

The quick answer is that the declines in health experienced by those who become unemployed during recessions appear to be more than offset by health improvements in the rest of the population.

One explanation is that a contracting economy usually means better air quality due to fewer commuters on the road, fewer vacationers traveling, and fewer factories billowing smoke. Poor air quality, according to some estimates, is responsible for up to 200,000 U.S. deaths annually, so declines in pollution can have a meaningful effect on mortality. Reductions in travel also translate to fewer motor vehicle fatalities, the leading cause of death in the U.S. for those under age 55.

Other possible explanations are more speculative, with different studies offering inconsistent results. It’s plausible that by reducing incomes, recessions might dampen consumption of unhealthy substances like cigarettes and alcohol. On the other hand, economic uncertainty might make people more anxious, which could increase smoking, drinking, and drug use. Some studies suggest that recessions increase heavy drinking, especially among men.

A third possibility focuses on time costs. When employment opportunities dwindle, the opportunity cost of leisure declines, which might encourage people to engage in behaviors that promote health but are time consuming, such as exercising regularly, preparing home-cooked meals, and maintaining an active social life. Here again, the empirical evidence defies simple characterizations. For example, while some studies find that exercise increases during recessions, total physical exertion tends to decline because some people lose physically-demanding jobs and don’t increase their exercise routines enough to make up the difference.

So while the pro-cyclicality of mortality in the U.S. is well-established, we haven’t yet nailed down the mechanisms responsible for it.