The human and economic costs of recessions are deep and well-documented. They can also have real health benefits, however, and seldom are they expressed so starkly as in this sentence in a new paper from the National Bureau of Economic Research: “The Great Recession provided one in twenty-five 55-year-olds with an extra year of life.”
That’s easily hundreds of thousands of Americans. Overall, the paper notes, age-adjusted mortality in the US fell by 2.3 percent during the Great Recession. The finding, from professors at MIT, the University of Chicago and McMasters University, broadly tracks previous research showing
that that mortality rates rise in good times and fall in hard times.
How might this be true?
One answer is related to air pollution, which is lower in recessions, typically because of reduced economic activity. The benefits of lower pollution levels persist long after the recession — at least 10 years, according to the researchers’ estimates. Air pollution reduction accounts for more than one-third of the mortality benefits from the Great Recession.
There are other ways recessions might help us live longer. Some people who lose their jobs might be able to spend more time exercising, for example, or engaging in self-care more generally. Others might have less money to spend on alcohol and other drugs. The overall quality of health care might improve as the industry is able to attract a better-educated workforce.
But these are all unverified hypotheses. The answer to why recessions can make people healthier remains largely a mystery.
The data do provide some additional clues. Except for cancer, for example, all major causes of mortality fell during the Great Recession. Decreases in cardiovascular-related deaths accounted for about half the mortality gains during that time. Furthermore, the mortality benefits were concentrated among Americans without college degrees. You might think that some of these improved health outcomes were due to people losing their stressful, low-paying jobs, but unemployment can be pretty stressful too.
For a 55-year-old, according to the paper’s estimates, about one-quarter of the economic costs of the Great Recession were countered by these mortality gains. So the Great Recession was still a very bad event — just less bad than we used to think. That is especially true for less educated Americans, who were hit harder by unemployment but also reaped the mortality gains.
At the top end of the age distribution, Americans aged 65 and older didn’t lose much from the Great Recession, in part because so many were already retired or working only part-time (in some cases, they were ensconced in jobs they were not going to lose). The researchers estimate that those over age 60 were also better off, on net, from the Great Recession.
This is discomforting in a country where the elderly vote at much higher rates than the young. Especially as the US ages, the political system may fail to prioritise avoiding the next recession.
Note that all of these estimates may be underestimates of the health benefits. The Great Recession was about 15 years ago, and there may be mortality benefits that are not yet visible in the data.
One lesson from this research is that the US might want to regulate air pollution regulation more strictly. If a reduction in air pollution can help explain better mortality rates during a recession, then it stands to reason that it should be reduced during good economic times as well.
Another lesson is that recessions may well become much worse, in net terms for human welfare, over time. It’s a bit of a paradox: As green energy spreads, and as more of the economy moves from the industrial to the service sector, there will be less air pollution for recessions to reduce. That will make having the proper monetary and fiscal policies — to limit recessions — all the more important.
It also would be valuable to figure out how else recessions reduce mortality, beyond decreasing pollution. Perhaps there are ways to reap those mortality gains without having to go through a recession. At a time when US life expectancy has been falling, even adjusting for Covid, such gains would be especially welcome.
Meanwhile, the study is a good reminder of how little we know about both recessions and the drivers of human mortality. There are only two certainties in this world, so the saying goes — death and taxes. The macroeconomist might add recessions to that list. All three of them may well be inevitable, but maybe we can make each of them just a bit less bad.
Tyler Cowen is a Bloomberg Opinion columnist. Views do not represent the stand of this publication.
Credit: Bloomberg
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