… and rise in good times.
Numerous studies reveal that death rates fall during recessions, even though mortality might be expected to rise rather than fall. After all, job loss is known to have bad consequences for the physical and psychological health of individuals.
Four economists from the University of California-Davis have come up with a simple explanation. Looking closely at US data, they find that, in good times, excess deaths are concentrated among the elderly, especially those elderly who are confined to nursing homes. When job vacancies rise and unemployment falls, nursing homes find it hard to recruit and retain skilled staff, so deaths rise among this group. For younger adult age groups, the observed effect of low unemployment on mortality is either negative or not significantly different from zero.
Why do death rates rise when the unemployment rate falls? Pro-cyclical mortality rates in the United States (and elsewhere) are now well-documented, but the causes of this association remain poorly understood. ….
We examine this pattern more closely and attempt to identify the mechanisms behind it. …. Our investigation suggests that changes in individuals’ own behavior contribute very little to pro-cyclical mortality. Looking across broad age and gender groups, we find that own-group employment rates are not systematically related to own-group mortality. In addition, we find that most of the additional deaths that occur during times of economic growth are among the elderly, particularly elderly women, who have limited labor force attachment. Focusing on mortality among the elderly, we show that cyclicality is especially strong for deaths occurring in nursing homes, and is stronger in states where a higher fraction of the elderly reside in nursing homes. We also demonstrate that staffing in skilled nursing facilities moves counter-cyclically. Taken together, these findings suggest that cyclical fluctuations in the mortality rate may be largely driven by fluctuations in the quality of health care.
Ann Huff Stevens, Douglas L. Miller, Marianne E. Page, and Mateusz Filipski, “The Best of Times, the Worst of Times: Understanding Pro-cyclical Mortality“, NBER Working Paper No. 17657, December 2011 (free access).
It would be interesting to replicate this research in countries where nursing homes are rare, to see what relationship there is – if any – between unemployment rates and mortality rates.
Thanks to Michael Littlewood for the pointer.