Great Recession Saved Lives: Research

News February 06, 2024 at 01:50 PM
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The Great Recession showed that, at least in the short run, a severe economic crisis may help people live longer, according to a team of economists led by Amy Finkelstein of the Massachusetts Institute of Technology.

The team found that the 2007-2009 slump improved the age-adjusted mortality rate in a community by 2.3%, or by 0.5% for every 1-percentage-point increase in the community's unemployment rate, and that the improvement lasted for at least 10 years.

"These estimates imply that the Great Recession provided one in 25 55-year-olds with an extra year of life," the Finkelstein team wrote in a working paper published behind a log-in wall on the website of the National Bureau of Economic Research.

What it means: An advisor might think that slumps will shorten clients' lives, by causing stress. The Finkelstein team's paper suggests that the opposite might be true.

Amy Finkelstein: Finkelstein is famous for her research on insurance-related economics topics such as the tendency for long-lived people to buy lifetime annuities and the surprisingly small size of the U.S. long-term care insurance market.

Working papers: A working paper is a scientific paper that has not yet been through a full peer review and publication editing process.

The data: The researchers combined mortality data from the Centers for Disease Control and Prevention and Medicare with population data, air pollution data and health data from those programs and other U.S. federal government data sources.

The findings: The team found that the level of improvement in mortality appeared to be similar for people of all ages, races and ethnicities but was particularly strong for people without any college education.

Factors such as reduced work stress and reduced exposure to flu and other diseases appeared not to play a big role, because the improvement in mortality was as great for people older than 65 as for younger, working-age people.

Increases in long-term care facility staffing did not appear to play a big role, because gains for people older than 65 were about the same for older people living in facilities and living in the community.

Reductions in air pollution appeared to cause about one-third of the improvement.

"Our findings suggest important trade-offs between economic activity and mortality," the researchers conclude.

Credit: Kacso/iStock

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