The Impact of Recessions on Public Health

Here is an interesting attempt to quantify the effect of recessions on mortality in EU countries. (To access the full article you will have to go to a subscribing library.) The authors claim that rising unemployment is associated with more deaths from violence (suicide and homicide) and alcohol abuse, but fewer deaths from road accidents. No significant effects were identified on other causes of mortality. The net effect on overall mortality is very small.
Two countries – Finland and Sweden – are identified as having social support policies in place that are particularly effective in mitigating the adverse health effects of rising unemployment.

25 thoughts on “The Impact of Recessions on Public Health”

  1. Christopher Ruhm has done lots of work on this using US and OECD data (see Economics and Human Biology, 2006) and has found that recessions on balance are good for health! More time to spend on exercise and less money to spend on bad things like drink and tobacco. But working the other way you have increased suicides. But on balance he concludes that both mortality and morbidity are lower when the labour market is strong.

  2. @David: Your post seems contradictory.

    “recessions on balance are good for health!”

    “But on balance he concludes that both mortality and morbidity are lower when the labour market is strong”

    unless labour market strong = recession??

  3. My apologies.

    Last sentence in my earlier post should have read:

    But on balance he concludes that both mortality and morbidity are lower when the labour market is weak.

  4. Richard Layard (in his book “Happiness” and elsewhere in his writings) makes the point that economists tend to ignore or downplay mental health in their indices of economic well-being. The reason is that it is more difficult to measure than physical health, hence it is convenient to ignore it. (Parenthetically, a similar “ignore what you cannot measure” error occured in bank risk management systems with regard to credit and liquidity risk).

    Layard makes the point that mental health is very badly affected by unemployment and this should be a central concern in measuring the “health” effects of recessions.

  5. Does anyone know if there has been work done on the incidence of mental health problems arising out of unemployment in the UK in the early 1990’s, following their last construction boom? It might make for interesting comparisons with our own situation.

  6. Greg, I did some work on this for Ireland, looking at the change in mental stress over the 1994-2000 period. Mental stress fell, and when you decompose this change, you find that much of it was due to increased employment (even after controlling for income). The paper is here
    http://www3.interscience.wiley.com/cgi-bin/fulltext/121541826/PDFSTART or in working paper version here http://www.ucd.ie/economics/research/papers/2007/WP07.10.pdf .

    It has to be a reasonable guess that as employment has fallen in recent years then mental stress has correspondingly risen.

    Re the point about economists “ignoring” mental health, my guess is that its not so much ignored out of convenience but more that, until recently at least, the type of nationally representative datasets that economists most often work with rarely include measures of mental health. The data I used in the above referenced papers, Living in Ireland (LII), is relatively unusual in having information on the General Health Questionairre (GHQ), a fairly standrd measure of psychological stress. Unfortunately LII only goes as far as 2001.

  7. @Gregory Connor

    I concur. This ‘ignore what you cannot measure’ is not confined to economists.
    See Irish Times – Breaking News

    http://www.irishtimes.com/newspaper/breaking/2010/0119/breaking35.htm

    Two-thirds of Irish people would not tell their employer about a mental health issue, according to new research [small sample] published today ………. This is Depression Awareness Week ……… Deputy Chris Andrews, co-convenor of the Cross Party Oireachtas Group on Mental Health, said that more needed to be done to challenge attitudes towards mental health issues in Ireland … “Research shows half of us believe that people with mental health problems shouldn’t have the same rights as everyone else and should be barred from certain jobs.”

    Deputy Dan Neville has been ploughing a lonely and rocky furrow in this area for a number of years ………….

    If anyone watched that Marie-Antoinette clone at the back of the audience [yer stukup wan wit dat touzand dollar make-over .. who wants the plebs to eat cake an work fr naathan] on Frontline last nite ………. well, one can imagine the response to any of her employees ‘feelin a bit blue’ ………

    Improving workplace mental health is probably [imho almost certainly] a more effective way of upping productivity than reducing minimum wage – but difficult to measure. The Scandinavians are ahead on this type of research ……. Google Guy Ahonen in Finland ……..

  8. @David Madden

    As I remember Layard had an analogous finding — it was not lower average income growth but rather the increase in unemployment that made recessions worse from a mental health perspective. It has been a few years since I read that book but I believe Layard had something along those lines; I believe it was for UK-only data.

    I agree with your reasonable guess, but measuring carefully the linkage is something that needs careful study – and measures of mental health are very important data item to include in all relevant data collection surveys.

  9. @David Madden

    “But on balance he concludes that both mortality and morbidity are lower when the labour market is weak.”

    There is no evidence whatever to support this theory based on Ireland’s pre-global recession experience. Professor Walsh himself would be the one to ask about this. He produced a paper on the subject (link below), entitled: ‘Undertakers the Main Losers during the Celtic Tiger period.” I would recommend anyone to read it as an antidote to the scaremongering rubbish written in the health sections of the national newspapers.

    http://www.comharsdc.ie/_files/commentary24_bwalsh%20undertakers.pdf

    As Professor Walsh shows in this paper, during the Celtic Tiger period, undertaking in Ireland became a dying industry. During that period, the age-standardised mortality rate in Ireland fell by almost one-third, by far the largest fall in mortality of any developed country in that period. As a result, by 2007/08 most undertaking firms in Ireland were in a grave situation. Whether or not their situation will now improve as a result of the recession is very debatable. My prediction would be that, if the recession is sharp but short, it will have little effect. But, if its a prolonged 1930s-type depression, then it might result in a slowdown in the fall in mortality rates.

    As for road deaths, while these have fallen sharply during the recession, they fell sharply most years during the boom as well. I’d say the provision of good mptorway-type roads is a far more important factor.

  10. Would the largest causal correlations for the “impact of recessions on public health” not occour between reductions in the public health care budget and mortality?

  11. John, it is certainly true that the mortality figures for Ireland showed a marked improvement in tha last decade. I guess what the Ruhm et al papers were trying to do was to abstract from long-term trends over time and just look at the impact of the business cycle on its own. So a distinction should be made between transitory increases in growth (declines in unemployment) and the consequences of more permanent growth. To do this properly I think you would need both cross-section and time-series variation to disentangle the effect – we don’t have the data to do this for Ireland, so we are merely one of the countries included in the Ruhm analysis. Though he suggests that those countries with low levels of social insurance protection (a group in which he includes Ireland) show more pronounced pro-cyclical mortality! But his data-period goes from 1960-1997 so he misses our boom.

    As you point out, the impact of our current recession on mortality etc may well depend upon the longevity of the downturn. I also agree that the reduction in road related deaths is more likely to have arisen from better roads and attitudes towards drinking and driving, as opposed to reduced traffic flows associated with economic activity.

  12. @JohnTO – “most undertaking firms in Ireland were in a grave situation. “.

    Crikey John. Groan.

    I was talking to Tom O’Mahoney the other day (he runs the unemployed networking website halfaloaf.ie) who says he has seen plenty of anecdotal evidence that mental health is suffering among the unemployed in Ireland and worsening as it turns into long term unemployment for a lot of people who have never faced unemployment before. Basically, people getting lonely and depressed and not going to the doctors or elsewhere for help and the stress of relationships at cracking point. I wonder when/if it will turn to anger?

  13. @Joseph

    “…he has seen plenty of anecdotal evidence that mental health is suffering among the unemployed in Ireland and worsening as it turns into long term unemployment for a lot of people who have never faced unemployment before. Basically, people getting lonely and depressed and not going to the doctors or elsewhere for help and the stress of relationships at cracking point.”

    I would strongly agree with you on this. What you say is very likely.

    I am firmly of the belief that:

    high economic growth/low unemployment is good for the nation’s health

    low economic growth/high unemployment is bad for the nation’s health

    Of course, this is a simplification. Some people may work themselves to death in a boom or spend their increased income in a boom on alcohol and drink themselves to death. But, these are exceptions that prove the rule. In general, economic growth promotes good health and recessions damage health. How damaging to the nation’s health (and indeed other
    nations’ health as its a global recession) the present recession will be will depend on how long it lasts (as David Madden seems to agree).

    While all this may seem a statement of the obvious, it should be borne in mind that, at the height of the Celtic Tiger, there was a serious body of opinion claiming that the economic growth was actually bad for the nation’s health. The environmental organisation, FEASTA, produced a book in 2005 entitled ‘Growth: The Celtic Cancer’, which (as its name implies)basically claimed that the economic growth was causing the nation’s health to deteriorate, and was leading to increased mortality. It was complete nonsense, of course. What I find annoying is that the FEASTA nonsense got masses of media publicity, while Professor Walsh’s far more factual analysis, which showed the opposite, got totally ignored by the media. In fact, in Professor Walsh’s paper that I gave a link to earlier, he makes that very point about lack of media interest in the beneficial effect on the nation’s health of the Celtic Tiger growth.

  14. @John

    We should be clear that anyone who says that gdp has no effect on wellbeing is just not playing by any sort of rules of evidence. Anyone who has a basic belief that the world is real and can be measured agrees that people in rich countries are happier than poor countries, for almost any conceptualisation you can give to happiness. What is at play is whether wealthy countries are affected by variable growth performances and how the business cycle impacts on wellbeing/health.

    In the Irish case, things are very mixed. The main driver of mortality improvements in Ireland up to the 1980s was infant mortality, and this decreased in Ireland largely independently of gdp and there is a poor relation between the two over time. The mortality decreases we observed among older groups didn’t begin until 1986, despite very variable growth performance up to then. The decline in old-age mortality then began before growth and continued apace through the boom. Young male mortality increased during the boom largely due to increases in the suicide rate. All in all, a mixed picture that neither supports your view nor a more radical view that growth is bad for people.

    I certainly think the transition from recession to growth is good for people’s psychological well-being but after that, habituation effects are strong in my view and this did occur in Ireland. In my analysis, variables such as job satisfaction and so on continued to improve through the boom but corely measured psychological distress did not change.

    PS Sean posts to a slightly early version of my paper. The print version corrects some mistakes in the references but substance is the same.

  15. @JohnTO -“the FEASTA nonsense got masses of media publicity”

    I recall going to cover a FEASTA conference once. They were an….er, interesting, er, bunch of people.. especially the nun with the leaflets about how the Lord was going to smite the bankers. My colleague and I were so overwhelmed by it we had to retire to the pub at lunchtime and not go back in the afternoon.

  16. I should also clarify that I get essentially the same quantitative results as David though with a different way of cutting the ghq data. in the language of my paper i class the psychological distress changes as very small (a tiny fraction of the effects of having a chronic illness or being unemployed). David’s paper seeks to explain those changes and even they are explained mostly by employment changes rather than income changes, supporting the view that jobless growth would not have been of any psychological benefit.

  17. Google Trends can provide a dynamic insight into a range of human behaviours, emotions, and opinions. I checked the incidence of search terms like ‘anxiety’, ‘stress’, and ‘depression’ from 2004 in Ireland. Interestingly, a general downward trend is clear for each of those three terms.

    (http://www.google.com/insights/search/#)

    Undoubtedly the Google population differs from the general Irish population but it is still representative, especially of working age people (16-65). I think a follow-up study of the HRB/ESRI National Psychological Well-Being and Distress Survey 2006 would give the best indication of how the current economic climate is affecting Irish people in this regard. As well as valuable insights into the individual factors that mediates the impact.

  18. @JohntheOptimist
    I didn’t choose the headline for that piece.
    It was right in as much as the number of deaths fell during the boom, but it occurred to me when attending a funeral in the west of Ireland recently that this was probably offset by increased expenditure per funeral – more elaborate marble headstones etc!

  19. @Brendan Walsh
    What is causing this inability to accept responsibility among the establishment? Take these board members of the ESRI:

    David Begg, General Secretary, Irish Congress of Trade Unions
    He was and still is on the board of a Central Bank whose banking system collapsed! In disgrace? No, on the board of the Central Bank, the ESRI and Aer Lingus!

    John Hurley, former Governor, Central Bank and Financial Services Authority.
    In disgrace? No, on the board of the ESRI!

    David Doyle, Secretary General, Department of Finance since mid 2006.
    Disgrace? ESRI!

  20. @Sean Lyons

    Ta for the link.

    @ Liam Delaney

    Neat paper. Filed with D. Madden’s for future ref.

    Minor point: the world is ‘critically’ real!

  21. Depression can be defined as anger turned inwards as we who are depressed cannot understand why we are unable to do what we used to do. It is a failure of the mind/body through stress. My psychiatrist says I was in a double bind, tell all and possibly suffer more or tell nothing and bear up. I told some of it but it did not help. I then failed. I am learning to live with overstress and I now say “I can’t” very frequently and my family thankfully, still put up with me. Not working has an effect on my self esteem and on my stress levels but then I write BS on blogs when I have the eneergy! The lack of energy is the hallmark and it dissipates quickly. Anger to take action against others is possibly less likely, though impulse control is definitely affected and can result in “suicide by cop”.

    Suicide rates will correlate to mental health. In the USA possibly going postal may correlate also. They have had economic disruption since 1999, disguised by the sub-prime blow out. Not everyone was able to benefit from that credit splurge.

    http://globaleconomicanalysis.blogspot.com/2010/01/escalating-pension-crisis-will-bankrupt.html The situation will not improve in deflationary times…… what is the effect likely to be in Ireland? Housing affordability is worsening through government action to reduce public pay.

    I recall that Israel had a hospital strike (in the 70s?) and mortality rates dropped, but that was during the period of the strike. Death rates overall may not have been affected or may have worsened.

    Cutting back medical expenditure can increase efficiency but ususally does result in less contact, which may be a good thing? The Pharma companies make more profit from drugs that do not cure quickly or completely than from those that do. Non-patentable remedies like Electromagnetism or teetree oil are cheaper and more effective than many conventional remedies but the med/Pharm oligopoly has legal protection and only in dire straits do these remedies get a hearing. Big medicine gets lottsa dough and an analysis of the Obama Health care remedy makes interesting reading. It all comes down to political priorities. Cuba has an effective health system that costs less than most but would deliberate refusal to use the most expensive patented, etc treatment be accepted by any but the poor? Maybe after a decade or so of lowered expectations, eh?

    Sunlight is a cheap remedy also!

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