Do Recessions Really Help People Live Longer, Healthier Lives?

Debate continues with new research looking at migration effects in historical case studies

See By Ben Leubsdorf of The WSJ.

"A new round has opened in the debate over whether recessions are good or bad for public health.
Some researchers have found that death rates fall during recessions. But a new study argues such findings may be distorted by migration, as people move away from places that have fallen on hard times and flock to places with booming economies.

Data from two historical case studies, the 1860s downturn in British textile-producing areas and the 1970s boom in Appalachia’s coal country, “illustrate that certainly there could be an issue, and that we need to take migration more seriously in this kind of analysis,” said University of Essex economist Vellore Arthi, who authored the paper with College of William and Mary economist Brian Beach and New York University economist W. Walker Hanlon.

It’s the latest chapter in an ongoing debate among economists about whether recessions are good or bad in terms of health outcomes. On the one hand, job loss can mean stress and depression, increased substance abuse and the loss of health insurance. On the other hand, unemployed people may benefit from having more time to exercise; less money to spend on alcohol, cigarettes and other vices; and no need to drive to work, reducing the number of fatal car crashes.

“There is considerable evidence that harmful behaviors – like heavy drinking and smoking – decrease in bad economic times, whereas health-enhancing activities such as exercise and social interactions increase,” University of Virginia economist Christopher Ruhm wrote in a 2015 study. The study described a procyclical relationship between business cycles and death rates: U.S. mortality rises during expansions and falls during recessions.

But the new working paper, distributed in June by the National Bureau of Economic Research, argued that migration can distort the picture. For instance, when people move away from regions experiencing an economic downturn, annual population estimates may not fully capture that movement, skewing mortality-rate data. Economic booms could also attract an influx of young, healthy workers, affecting regional mortality rates by changing the local population’s demographics.

Adjusting for those factors, the three economists said mortality appeared to increase rather than decline during the British textile-region downturn, and there was “little evidence…that the Appalachian coal boom had any real effect on underlying population mortality.”

Mr. Ruhm, in an interview, said economists do “need to be thinking about migration flows” in their research, but indicated he was skeptical that such movements explain away earlier findings that mortality moves with the business cycle. He said modern population estimates likely do a better job capturing movement, and that it could be difficult to generalize from the specific circumstances of the two case studies.

“I think they’re on to something, but I don’t think it changes the main story,” he said."