LIVES VERSUS LIVELIHOODS: THE IMPACT OF THE GREAT RECESSION ON MORTALITY AND WELFARE

Area of Science:

• Public Health
• Economics
• Environmental Science

Background:

• Economic downturns can influence public health outcomes.
• The Great Recession provides a unique opportunity to study the relationship between economic conditions and mortality.
• Previous research has not fully quantified the long-term mortality impacts of severe recessions.

Purpose of the Study:

• To quantify the impact of the Great Recession's severity on mortality rates in the United States.
• To explore the mechanisms driving recession-related mortality changes.
• To assess the implications of these findings for macroeconomic models and welfare analysis.

Main Methods:

• Utilizing spatial variation in the Great Recession's severity across U.S. regions.
• Estimating the effect of unemployment rate changes on age-adjusted mortality rates.
• Analyzing mortality reductions across different causes of death, demographic groups, and age strata.
• Investigating the role of reduced aggregate economic activity and air pollution as contributing factors.

Main Results:

• A Great Recession-level increase in unemployment rate correlates with a 2.3% decrease in average annual age-adjusted mortality.
• Mortality reductions were observed across various causes of death and persisted for at least 10 years.
• The impact was concentrated in the population with a high school education or less, with similar percentage reductions across all ages, but elderly mortality declines accounted for the majority of the total reduction.
• Reduced air pollution emerged as a significant mechanism driving these recession-induced mortality declines.

Conclusions:

• Economic recessions can lead to substantial, long-lasting reductions in mortality.
• These findings highlight the significant impact of economic downturns on public health, particularly for vulnerable populations.
• Incorporating procyclical mortality estimates into macroeconomic models significantly reduces the estimated welfare costs of recessions, especially for less educated individuals and older populations.