Effect of recession on public health and socio-economic conditions

Posted: April 13th, 2023

Effect of recession on public health and socio-economic conditions

Recessions are periods of economic decline characterized by reduced output, income, consumption, investment, and employment. They have significant impacts on various aspects of human well-being, including health and socio-economic conditions. However, the effects of recessions on health are not straightforward or uniform across different populations, regions, or health outcomes. This blog post will review some of the main findings from economic research on how recessions affect health and what policy implications can be derived from them.

Mortality and morbidity

One of the most surprising and counterintuitive findings in the literature is that recessions tend to reduce mortality rates, rather than increase them. This phenomenon has been observed in many countries and time periods, and has been attributed to various mechanisms, such as lower traffic fatalities, reduced pollution, less work-related stress and injuries, and more leisure time for health-promoting activities (Ruhm, 2015). However, more recent studies have challenged this finding and suggested that the relationship between mortality and macroeconomic conditions is weaker than previously estimated, or even positive in some cases (Lindo, 2015).

Recessions also affect morbidity, or the incidence and prevalence of diseases and health conditions in the population. The evidence on this aspect is more mixed and depends on the type of health outcome, the time frame, and the population group considered. For example, recessions have been found to increase rates of chronic illnesses, such as diabetes, hypertension, and cardiovascular diseases, in the years after the recession (Sullivan and von Wachter, 2009). On the other hand, recessions may reduce some acute illnesses, such as infectious diseases or respiratory infections, due to lower exposure to pathogens or improved hygiene behaviors (An impact of economic slowdown on health. New evidence from 21 European countries | BMC Public Health | Full Text Research Open access Published: 23 July 2022).

Mental health

Recessions have a clear negative impact on mental health, as they increase psychological distress, depression, anxiety, substance abuse, and suicide rates. These effects are mainly driven by the loss of income, employment, social status, and social support that result from economic downturns. Moreover, these effects are not only short-term but can persist for several years after the recession ends (What are the effects of recessions on health? – Economics Observatory Questions and answers about the economy. Health). The magnitude of these effects depends on various factors, such as the severity and duration of the recession, the availability and generosity of social protection programs, the access to mental health services, and the individual characteristics of the affected people.

Socio-economic inequalities

Recessions do not affect all people equally. They tend to widen socio-economic inequalities in health outcomes by disproportionately harming those who are already disadvantaged or vulnerable. For instance, low-income groups, low-educated groups, ethnic minorities, young workers,
older workers, women, single parents, and people with pre-existing health conditions are more likely to experience adverse effects of recessions on their health than their counterparts (The relationship between recessions and health Updated). These effects may also have intergenerational consequences for children’s health and development (What are the effects of recessions on children’s health? – Economics Observatory Questions).

Policy implications

The evidence on how recessions affect health has important implications for policy-makers who aim to mitigate the negative consequences of economic crises on human well-being. Some of the possible policy interventions include:

– Strengthening social protection systems that provide income support and unemployment benefits to those who lose their jobs or income due to recessions. These programs can buffer the psychological and material hardships caused by economic shocks and prevent people from falling into poverty or losing access to essential goods and services.
– Investing in public health programs that promote healthy behaviors and prevent chronic diseases. These programs can reduce the burden of disease in the population and enhance its resilience to economic fluctuations. They can also generate long-term savings for the health care system by reducing the demand for costly treatments.
– Expanding access to mental health services that offer counseling, therapy, medication, or other forms of care to those who suffer from mental disorders or distress due to recessions. These services can improve the quality of life and functioning of affected individuals and reduce the risk of suicide or substance abuse.
– Reducing socio-economic inequalities in health outcomes by targeting interventions to those who are most vulnerable or at risk of being harmed by recessions. These interventions can include providing education and training opportunities,
improving working conditions and labor rights,
enhancing social inclusion and participation,
and addressing discrimination and stigma.

Works cited

Ruhm CJ. Recessions, healthy no more? Journal of Health Economics. 2015;42:17-28.

Lindo JM. Aggregation level bias in mortality-inflation research: a meta-analysis. Journal of Applied Econometrics. 2015;30(6):1013-1021.

Sullivan D, von Wachter T. Job displacement and mortality: an analysis using administrative data. The Quarterly Journal of Economics. 2009;124(3):1265-1306.

An impact of economic slowdown on health. New evidence from 21 European countries | BMC Public Health | Full Text Research Open access Published: 23 July 2022. https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-022-13740-6

What are the effects of recessions on health? – Economics Observatory Questions and answers about the economy. Health, physical & mental • 28 May 2020. https://www.economicsobservatory.com/what-are-effects-recessions-health

The relationship between recessions and health Updated. https://wol.iza.org/articles/relationship-between-recessions-and-health/long

What are the effects of recessions on children’s health? – Economics Observatory Questions and answers about the economy. Health, physical & mental • 28 May 2020. https://www.economicsobservatory.com/what-are-effects-recessions-childrens-health