Fiscal consolidation and impaired health? Evidence from 27 European Union countries

After the global financial crisis of 2007-2008 and the subsequent Great Recession, many governments in European Union countries implemented fiscal consolidation programmes aimed at restoring public finances, often through expenditure cuts. We examine the impact of these programmes on a broad set of health indicators capturing overall population health as well as vulnerabilities at early and premature stages of the life cycle. Exploiting the staggered adoption of fiscal consolidation programmes across countries, we estimate a Difference-in-Differences model with multiple time periods and variation in treatment timing. Using data for the 27 European Union countries over the period 1995-2015, we find that the fiscal consolidation programmes are associated with higher mortality and premature mortality, increased infant mortality, and lower life expectancy.