Working Paper: NBER ID: w11007
Authors: Christopher J. Ruhm
Abstract: Although health is conventionally believed to deteriorate during macroeconomic downturns, the empirical evidence supporting this view is quite weak and comes from studies containing methodological shortcomings that are difficult to remedy. Recent research that better controls for many sources of omitted variables bias instead suggests that mortality decreases and physical health improves when the economy temporarily weakens. This partially reflects reductions in external sources of death, such as traffic fatalities and other accidents, but changes in lifestyles and health behaviors are also likely to play a role. This paper summarizes our current understanding of how health is affected by macroeconomic fluctuations and describes potential mechanisms for the effects.
Keywords: macroeconomic conditions; health; mortality
JEL Codes: E32; I12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Economic downturns (E32) | Mortality decreases (I12) |
| Economic downturns (E32) | Reduced external deaths (e.g., traffic fatalities) (R48) |
| Economic downturns (E32) | Healthier behaviors (I12) |
| Healthier behaviors (I12) | Improved physical health (I19) |
| Economic downturns (E32) | Improved health outcomes (I14) |