Via Mark Thoma, I came across this fascinating interview with economist Christopher Ruhm. I'm familiar with Ruhm's research on paid family leave policies, and I plan to do a post or two about paid family leave soon. What I didn't realize is that Ruhm does a bunch of other interesting research as well. One topic he has looked at is the impact of economic recessions on health.
The answer to that question seems pretty obvious, right? You always hear about how recessions are linked to increases in divorce, crime, domestic violence, etc. And it would stand to reason that economic stress and increased unemployment would take a toll on your health.
Prior research did indeed link recessions to poor health outcomes. But as Ruhm points out in the interview, those studies used flawed methodologies that did not control for confounding factors. So when Ruhm studied this question using up-to-date methods, he discovered that, lo and behold, economic downturns are actually associated with positive health outcomes and lower mortality. Moreover, this basic finding holds both in the U.S. and in other economically advanced countries.
What's the reason for this? One important explanation is that, during recession, people adopt healthier habits. Says Ruhm:
In my research, I also look at behaviors, like drinking, smoking, andexercise. All of these trends exhibit a consistent pattern. When theeconomy weakens, people smoke less, they are less likely to drinkheavily, and they tend to exercise more.
If you look at drinking, you notice that heavy drinkers become lightdrinkers when the economy deteriorates. Yet light drinkers don'tabstain from drinking. For smoking, you see the same result. Peoplealso shift from being sedentary to being somewhat active, but not veryactive.
Recessions cause lower mortality rates overall, but there is some variation in the effect of recessions on cause of death. During recessions, motor vehicle fatalities are lower, because people drive less. Deaths from heart disease, flu, pneumonia, and other causes also go down. There are some exceptions, however. The number of cancer deaths is unaffected by economic trends, which makes sense, because cancer tends to progress over a long period and economic trends are short-term. And deaths by suicide actually increase during recessions and decrease when times are better. Ruhm says the evidence indicates that recessions may improve physical health, but they may hurt your mental health.
So why is it that people's health habits tend to improve during a recession? Ruhm suggests that the reason may be that during good economic times, people worker longer hours, and this causes them to neglect their health. But when they work less, they have more time to focus on exercise, eating right, etc. Says Ruhm:
Let's say I offer you, for the next year, a tripling of your hourlywage. It would just be for one year, and you can work as many hours asyou want. Most people are going to rationally say they are going towork a lot while they can get the high wages. But while they areworking really hard, they may be doing some other things that aren'tgreat for their health. They won't have time to exercise, or they'regoing out and eating really fatty meals.
The interviewer wonders whether Ruhm's results conflicts with standard economic theory which holds that individuals are rational. He asks Ruhm, "Is it rational to engage in behavior that jeopardizes your health when the economy is booming?" Here is Ruhm's response, in part:
. . . [W]hile these results represent a predictable response tochanges in economic incentives, that does not mean people don't makemistakes. For instance, many individuals may not fully account for thenegative health effects of the extra work they undertake when receivinga temporary wage increase, or when economic conditions temporarilyimprove. So the responses reflect the efforts by individuals tooptimize but they may ultimately not be fully rational.
So relax and enjoy the recession, folks! This is probably the one and only time where something George Bush is responsible for has improved the nation's health.
--K.A. Geier
