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Local Economic Conditions and Health

By February 21, 2014Commentary

Most of us would think that the overall health of a community declines during an economic downturn, in part because people may have less money to spend on health and because they may be more stressed due to financial concerns.  Research from the National Bureau of Economic Research suggests that the opposite is true.   (NBER Paper)   Improving on a long line of research, the author attempts to elucidate whether a different effect is seen on health from economic conditions at a local or county level, a state level, or a regional, multi-state  level.  He first disentangles the effect of migration, because higher socioeconomic individuals, who tend to have better health, are the most likely to leave an area suffering from a recession.  He uses two primary measures of health–mortality and infant birth weight.

His primary finding is that the link between economic conditions and the health measures is highly dependent on, and changes with, the level of geographic aggregation chosen, with smaller areas showing greater effects.  Local downturns seem to cause the greatest reductions in overall mortality, but even at larger geographic unit levels, the relationship persists, although it is relatively small.  the incidence of low birth weight babies also declines during recessions, in this case with a stronger relationship also appearing to exist at a local level.

Other research looking at individual experience shows that job loss and other economic hardships tend to worsen the individual’s health.  But there is much research that at the larger level, overall health measures seem to improve, which seems contradictory.  The paper does not give much discussion to the why of this relationship, if it exists.  It is very puzzling, but perhaps there is a reduction in stress, fewer car accidents, less money to smoke and drink or more people are eligible for Medicaid and get better care.  When the researcher decomposed mortality by cause of death, the effect appears strongest for car deaths and heart disease deaths, although at a regional level, suicides appear to be increased, which seems logical.    More research would be useful to try to pin down the exact causal relationship and whether it is that the people who keep a job are showing an improvement in health that is greater than the decrement in health for those who are economically stressed during recessions.

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