A large literature following Ruhm (2000) suggests that mortality falls during recessions and rises during booms. The panel-data approach used to generate these results assumes that either there is no substantial migration response to temporary changes in local economic conditions, or that any such response is accurately captured by intercensal population estimates. To assess the importance of these assumptions, we examine two natural experiments: the recession in cotton textile-producing districts of Britain during the U.S. Civil War, and the coal boom in Appalachian counties of the U.S. that followed the OPEC oil embargo in the 1970s. In both settings, we find evidence of a substantial migratory response. Moreover, we show that estimates of the relationship between business cycles and mortality are highly sensitive to assumptions related to migration. After adjusting for migration, we find that mortality increased during the cotton recession, but was largely unaffected by the coal boom. Overall, our results suggest that migration can meaningfully bias estimates of the impact of business-cycle fluctuations on mortality.
Estimating the Recession-Mortality Relationship When Migration Matters by Vellore Arthi, Brian Beach, William Walker Hanlon :: SSRNJune 24, 2017
Do More of Those in Misery Suffer from Poverty, Unemployment or Mental Illness? by Sarah Flèche, Richard Layard :: SSRNFebruary 3, 2017
Studies of deprivation usually ignore mental illness. This paper uses household panel data from the USA, Australia, Britain and Germany to broaden the analysis. We ask first how many of those in the lowest levels of life‐satisfaction suffer from unemployment, poverty, physical ill health, and mental illness. The largest proportion suffers from mental illness. Multiple regression shows that mental illness is not highly correlated with poverty or unemployment, and that it contributes more to explaining the presence of misery than is explained by either poverty or unemployment. This holds both with and without fixed effects.
The Dynamic Effects of Health on the Employment of Older Workers by Richard W. Blundell, Jack Britton, Monica Costa Dias, Eric French :: SSRNDecember 13, 2016
Using data from the Health and Retirement Study (HRS) and the English Longitudinal Study of Ageing (ELSA), we estimate a dynamic model of health and employment. We estimate how transitory and persistent health shocks affect employment over time. In a first step, we formulate and estimate a dynamic model of health. The procedure accounts for measurement error and the possibility that people might justify their employment status by reporting bad health. We find that health is well represented by the sum of a transitory white noise process and a persistent AR(1) process. Next, we use the method of simulated moments to estimate the employment response to these shocks. We find that persistent shocks have much bigger effects on employment than transitory shocks, and that these persistent shocks are long lived. For this reason employment is strongly correlated with lagged health, a fact that the usual cross-sectional estimates do not account for. We also show that accounting for the dynamics of health and employment leads to larger estimates of health’s effects on employment than what simple OLS estimates of health on employment would imply. We argue that the dynamic effect of health on employment could be generated by a model with human capital accumulation, where negative health shocks slowly reduce the human capital stock, and thus, gradually cause people to exit the labor market.
Does a Mandatory Reduction of Standard Working Hours Improve Employees’ Health Status? by Rafael Sánchez :: SSRNDecember 9, 2016
Most of the empirical evidence regarding the impact of reductions of standard working hours analyzes its effects on employment outcomes, family life balance, and social networks, but there is no empirical evidence of its effects on health outcomes. This study uses panel data for France and Portugal and exploits the exogenous variation of working hours coming from labor regulation and estimates its impact on health outcomes (from 39 to 35 hours a week and from 44 to 40 hours a week, respectively). Results suggest that the mandatory reduction of standard working hours decreased the working hours of treated individuals (and not the hours of individuals in the control group). Results also suggest that the fact of being treated generated a negative (positive) effect on young males’ (females’) health in France. No effects on health outcomes were found for Portugal.
Trade Liberalization and Mortality: Evidence from U.S. Counties by Justin R. Pierce, Peter K. Schott :: SSRNDecember 9, 2016
We investigate the impact of a large economic shock on mortality. We find that counties more exposed to a plausibly exogenous trade liberalization exhibit higher rates of suicide and related causes of death, concentrated among whites, especially white males. These trends are consistent with our finding that more-exposed counties experience relative declines in manufacturing employment, a sector in which whites and males are over-represented. We also examine other causes of death that might be related to labor market disruption and find both positive and negative relationships. More-exposed counties, for example, exhibit lower rates of fatal heart attacks.
According to the World Economic Forum’s 2014-15 Global Competitiveness Report, the United States has the third most competitive economy in the world. The U.S. ranked fifth in 2013-14. Switzerland has the most competitive economy. Global competitiveness is “defined as the set of institutions, policies and factors that determine the level of productivity.”
From the report itself regarding U.S.: “some weaknesses in particular areas remain to be addressed. The business community continues to be rather critical, with trust in politicians still somewhat weak (48th), concerns about favoritism of government officials (47th), and a general perception that the government spends its resources relatively wastefully (73rd). The macroeconomic environment remains the country’s greatest area of weakness (113th), although the fiscal deficit continues to narrow and public debt is slightly lower for the first time since the crisis.”
Dranove and his colleagues use this data to estimate that 70 percent of the slowdown in health spending between 2008 and 2010 was due to the Great Recession. Another 30 percent of the slowdown, then, would have still occurred regardless of the economic downturn.Put another way: health spending grew 2.6 percentage-points slower between 2009 and 2011 than it did in the three years prior. This paper suggests that 1.76 percentage-points of that slowdown were due to the recession — and the remaining 0.84 percentage point due to something else.