The Effect of Macroeconomic Fluctuations on Health: Evidence from 2000-2010

Abstract

Recessions are broadly understood to impose negative consequences on the populations who experience them, but recent scholarship shows, counterintuitively, that some measures of health improve as the economy worsens. Using microdata from the Behavioral Risk Factor Surveillance System (BRFSS) for the years 2000-2010, I examine the effect of state unemployment on the health and health behaviors, including care utilization, of the working-age population. I find continued support for the hypothesis that health is countercyclical, even in the midst of the Great Recession. Fixed-effects analysis reveals positive associations between rising joblessness and both physical and mental well-being, as well as increased rates of exercise. The last finding suggests that changes in the time-price of health-promoting activities may be one reason why the population becomes healthier as times grow tougher.