The Best of Times, the Worst of Times: Understanding Pro-cyclical Mortality

Abstract

It is well known that mortality rates are pro-cyclical. In this paper, we attempt to understand why. We find little evidence that cyclical changes in individuals’ own employment-related behavior drives the relationship; own-group employment rates are not systematically related to own-group mortality. Further, most additional deaths that occur when the economy is strong are among the elderly, particularly elderly women and those residing in nursing homes. We also demonstrate that staffing in nursing homes moves counter-cyclically. These findings suggest that cyclical fluctuations in the quality of health care may be a critical contributor to cyclical movements in mortality.

Recessions, healthy no more?

“…In Ruhm's (2000) analysis of the U.S., covering 1972-1991, a one percentage point increase in Some investigations suggest that mortality has become less procyclical or countercyclical in recent years. Using methods and data similar to Ruhm (2000), Stevens et al (2011) find that a one percentage point increase in the state unemployment rate was associated with a 0.40% reduction in total mortality from 1978 to 1991, but a smaller 0.19% decrease when extending the analysis through 2006 6 . McInerney and Mellor (2012) estimate that a onepoint rise in joblessness lowered the mortality rates of persons 65 and over by 0.27% during 1976-1991, but raised them 0.49% from 1994 to 2008.…”

The Great Recession and Health

“…These studies argue that the elderly contribute most of the avoided deaths in recessions, but changes in time use or employment conditions, or voluntary changes in substance use, are unlikely to explain their improved survival. Some research has focused on specific ages, causes, and locations of deaths and argues that nursing home care quality improves in recessions, when more qualified health care personnel are seeking work, potentially explaining why deaths among the institutionalized elderly decline in those periods (Stevens et al 2011). Others have argued that recessions induce medical care providers to accept more public insurance and that other changes in the quality and availability of health care, as well as declines in air pollution that are particularly salient for the elderly, account for much of the procyclical association (Miller et al 2009).…”

Health Care Inflation and Its Implications for Monetary Policy

“…For example, studies using total mortality as the health indicator tend to find health is countercyclical (e.g., Neumayer 2004;Ruhm 2000) whereas studies using body weight and mental illness as the health indicator show that health is procyclical (e.g., Charles and DeCicca 2011;Latif 2014). Several studies further suggest that the relationship between health and macroeconomic conditions may have become less cyclical in recent years (e.g., Ruhm 2013;Stevens et al 2011;Tekin, McClellan, and Minyard 2013) In this section, we examine the correlation between health and several macroeconomic variables. The purpose of this exercise is to produce some empirical moments to check model performance, rather than to provide direct evidence on the empirical relationship between health and unemployment as some of the micro studies do.…”