Why Are Recessions Good for Your Health? Understanding Pro-Cyclical Mortality

Douglas Miller, University of California, Davis
Marianne Page, University of California, Davis
Ann H. Stevens, University of California, Davis
Mateusz Filipski, University of California, Davis

A series of influential papers by Christopher Ruhm (2000, 2003, 2005) documents that recessions are “good for your health” – or more specifically, that mortality rates are strongly pro-cyclical. These estimates come from state-year panel data, with state and year fixed effects and often state-specific time trends. Why might such a relationship exist? Previous work has often suggested that a likely mechanism is the negative impact of work on individuals’ health, either because it increases the opportunity cost of time, or because of work-related stress. This paper shows that other important mechanisms are at work that primarily affect mortality among the non-working age publication. Specifically, we show evidence of declines in health care quality, particularly in nursing homes, during economic expansions. This is important in understanding the overall cyclicality, since the vast majority of deaths occur among the elderly.

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Presented in Session 14: Economic Conditions and Mortality