Saturday, 3 October 2009

Downturns and life expectancy

I don't buy it. GNXP points to a study claiming that the Great Depression increased life expectancy.
Recent events highlight the importance of examining the impact of economic downturns on population health. The Great Depression of the 1930s was the most important economic downturn in the U.S. in the twentieth century. We used historical life expectancy and mortality data to examine associations of economic growth with population health for the period 1920-1940. We conducted descriptive analyses of trends and examined associations between annual changes in health indicators and annual changes in economic activity using correlations and regression models. Population health did not decline and indeed generally improved during the 4 years of the Great Depression, 1930-1933, with mortality decreasing for almost all ages, and life expectancy increasing by several years in males, females, whites, and nonwhites. For most age groups, mortality tended to peak during years of strong economic expansion (such as 1923, 1926, 1929, and 1936-). In contrast, the recessions of 1921, 1930-1933, and 1938 coincided with declines in mortality and gains in life expectancy. The only exception was suicide mortality which increased during the Great Depression, but accounted for less than 2% of deaths. Correlation and regression analyses confirmed a significant negative effect of economic expansions on health gains. The evolution of population health during the years 1920–1940 confirms the counterintuitive hypothesis that, as in other historical periods and market economies, population health tends to evolve better during recessions than in expansions.
It sounds to me like what's going on is that the downturn makes folks poorer and consequently more willing to take on risk for little compensation. When the economy ticks up a bit, folks jump into those riskier jobs and mortality goes up. But it isn't the recovery that did it; rather, it's the effect of the prior increase in poverty affecting folks' willingness to accept risk.

At least that's my first cut explanation. It's at least consistent with the Viscusi and Aldy finding that the income elasticity of the value of a statistical life is about 0.5 to 0.6. Recall that Viscusi's numbers all come from revealed willingness to pay to accept risk: as folks get richer, they require higher compensation for a given risk. If the first study were right, elasticity would be negative. I don't buy it.


  1. Have you seen any of the stuff Christopher Ruhm has done on the subject? I had to present a paper of his for health econ last semester where he found that smoking goes down in recession and exercise and healthy eating increase. The way he described it was that during temporary booms the opportunity cost of spending time to worry about health was high, whereas during recessions people had alot of new-found leisure time and this was used to work on health.
    Interesting paper anyway, I'd like to see what you think of it.

  2. I can buy that as well. If you expect the boom to be temporary, then you smooth both income and health investments. I'll have to read the paper some time, but after semester's finished :>

  3. I was thinking along the same lines. Less money means doing more yourself, less transport and more walking, growing your own veges, eating at home more, eating out less. It's possible that tightened financial situations lead people to make simpler/cheaper choices, and that those choices are healthier.

  4. @PaulL: can only be true for a transitory shock though. Otherwise, the Viscusi numbers come back to bite.