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Policy: Economy

Past recessions boosted health, but not the Great Recession

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Beltway Confidential,Health,Jobs,2008 Financial Crisis,PennAve,Joseph Lawler,Economy,Analysis,Budgets and Deficits

The lingering jobs crisis following the 2008 financial crash lacks one of the few silver linings associated with previous recessions: people living healthier lifestyles. A new economic study shows that there have been no health benefits associated with the most recent recession and even health declines for certain subgroups, including Hispanics.

Why would recessions improve health? Past studies showing a link between downturns and improved health have pointed to the possibility that work itself is stressful, and that less time at work brought on by a stalling economy could mean fewer stress-related illnesses. Jobless workers could spend their extra time on exercise or other healthy activities. Less money in consumers’ pockets also generally translates to less drinking.

A new working paper released Monday by the National Bureau of Economic Research, however, examines the relationship between recent state employment rates and a range of health indicators and healthy behaviors. It finds that the Great Recession has had, at best, no detectable health benefits for the population.

The authors, Erdal Tekin and Karen Jean Minyard of Georgia State University with Chandler McClellan of NBER, suggest that the severity and length of the recent downturn have set it apart from other post-World War II recession in terms of the impact on Americans’ health.

They write that in the Great Recession, “a higher number of individuals have exhausted all of their financial options to cope with joblessness and have fallen into the ranks of poverty.” A greater number have taken up government assistance for the first time, as evidenced by the record increases in the Supplemental Nutrition Assistance Program, or food stamp, rolls.

Other factors have conspired to strain household finances, including the number of mortgages “underwater” – meaning that the owners owe more than their house is worth – and the enormous loss of employer-provided health insurance.  The authors cite a recent paper finding that “the share of children and working-age adults with employer-sponsored health insurance dropped by 10 percentage points from 63.6 percent to 53.5 percent” between 2007 and 2010.

The result is that there has been no population-wide increase in health measures that followed other recessions. The only group that exercised more in the wake of increased joblessness was white males. The authors found that people with only high school diplomas fared worse in terms of physical health than those with college degrees. More highly educated people, however, showed more signs of mental distress, a finding the authors suggest shows the “bigger mental toll” of job loss for those who have higher earnings potential.

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