Editor’s Blog 9th October 2008: A Ruhm thing – could recession be good for your health?

You may not yet have heard of Dr. Christopher Ruhm, Jefferson-Pilot Excellence Professor of Economics at the University of North Carolina at Greensboro, USA. I suspect his work will receive wider attention very soon.

"When the economy tanks, people are healthier but they may not necessarily be happier"

In May 2000, Ruhm published ‘Are recessions good for your health?’ in the Quarterly Journal of Economics. His research looked at US death rates and health behaviour plotted against economic shifts and jobless rates from 1972 to 1991. Crucially, his methodology compared between US states, so he was able to track the effects when certain states’ economies were bucking orevailing national trends and doing unusually well (or badly).

Ruhm’s work observed sharp reductions in death rates in the 1974 and 1982 recessions, and increased in the economic recovery of the 1980s. It found that for every one per cent increase in state unemployment rates, there was a correlated 0.5 per cent decline in the death rate. Overall, the death rate fell by more than 8 per cent in the 20-year period of mostly economic decline, led by reductions in heart disease and car crashes.

'Recessionary times had a greater impact on both mental health and on conditions amenable to healthcare'

This study of the economic downturn did not, however, show that there were no effects on health. It found that recessionary times had a greater impact on both mental health and on conditions amenable to healthcare. Suicides rose 2 per cent, and homicides by 12 per cent.

The article’s abstract says, “Total mortality and eight of the ten sources of fatalities examined are shown to exhibit a procyclical fluctuation, with suicides representing an important exception. The variations are largest for those causes and age groups where behavioral responses are most plausible, and there is some evidence that the unfavorable health effects of temporary upturns are partially or fully offset if the economic growth is long-lasting. An accompanying analysis of microdata indicates that smoking and obesity increase when the economy strengthens, whereas physical activity is reduced and diet becomes less healthy”.

Interviewed this year for a publication produced for the Federal Reserve Bank of Richmond (see, they’re not all bad!), Ruhm said of his research, “My first analysis of mortality rates was not at all what I expected. When times were good, mortality rates were increasing and when times were bad they were decreasing. When I first got the results, I didn't particularly believe them. I expanded the analysis in a variety of ways to see if the results would change, but they didn't.

“What ultimately convinced me of the result (was that) I made a picture that overlaid the national mortality rates and unemployment rates — after de-trending them and normalising them so the scales matched — and when I did all that, I found they were almost a mirror image. It was at that point I really believed my results.

“The reasons for mortality increasing when the economy strengthens vary by cause of death. If you look at motor vehicle fatalities, they go up pretty dramatically when the economy improves. That's not so surprising. People drive more when times are good. But it's also true that deaths from heart disease or flu and pneumonia go up when the economy improves and down when the economy deteriorates. Across a wide variety of health measures I was finding the same result.

'Cancer was unrelated to economic trends'

“There were a couple of exceptions. Cancer was unrelated to economic trends. Since we were looking at relatively short-term changes, it's no surprise that we would see this result. Whereas, for something like heart attacks, we do notice that short-term macroeconomic changes can have a big effect.

Recession makes you healthier, not happier
“Another exception was suicides. They went down when the economy improved, and up when it deteriorated. That's consistent with a long line of work on suicides. That also suggests to me, since suicide has a mental health component, it might be the case that economic patterns I had identified mainly refer to physical health measures. That led me to conclude that when the economy tanks, people are healthier but they may not necessarily be happier.

“I also look at behaviors, like drinking, smoking, and exercise. All of these trends exhibit a consistent pattern. When the economy weakens, people smoke less, they are less likely to drink heavily, and they tend to exercise more. If you look at drinking, you notice that heavy drinkers become light drinkers when the economy deteriorates. Yet light drinkers don't abstain from drinking. For smoking, you see the same result. People also shift from being sedentary to being somewhat active, but not very active. We also don't see a big change in the number of people who are overweight, but we do see a reduction in severe obesity”.

In a report for the US National Bureau of Economic Research in March 2006, Ruhm examined federal mortality statistics from 1979 to 1998, comparing periods of higher and lower employment rates as a measure of economic conditions. He found a one percent reduction in unemployment was associated with a 0.75% rise in heart disease deaths (about 3,900 additional deaths a year). The finding held across all age groups. Ruhm has proposed the theory that in recessions, lower industrial activity reduces air pollution from factories and vehicles. "Short-term changes in pollution have been tied to heart attacks," he has said.

Ruhm has also done work on data compiled by the US Centers for Disease Control and Prevention (in the world's largest telephone survey, they monitored health risk behaviours between 1987 and 2000). This found that in recessions, there are falls in three key risk factors relating to heart disease: smoking, obesity and a sedentary lifestyle. His work suggests that a one percent increase in unemployment reduces smoking prevalence by 0.6%; the obesity rate by 0.3% and physical inactivity by 1.8%. Ruhm has suggested that while small, the figures could point towards positive health trends.

Not driving …
In a November 2002 report for the National Bureau of Economic Research, Ruhm’s study of 23 developed nations suggested that a 1% rise in employment correlates with a 2.1% increase in motor vehicle accidents.

… and not driven to drink
He has also observed that recessions cause people who already drink alcohol to drink less of it. Moreover, the heaviest drinkers cut back most. This finding is based on Centers for Disease Control figures and alcohol sales statistics, leading Ruhm to speculate in a July 2002 paper in the Journal of Health Economics that while the stress cuased by recession-related worries may be an impetus to drinking alcohol, it is counteracted by financial worries and a need to reduce expenditure.

According to Ruhm, not only does a recession make people smoke less, lose weight and do more physical activity in their spare time, it is the least healthily-behaving people who make the biggest health behaviour changes. He observed the highest drop in tobacco use among heavy smokers; the biggest weight loss in the severely obese; and the most increase in exercise among people who were completely physically inactive.