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The Worse the Economy Gets, the Longer People Live

Author: Peter R. Orszag, Adjunct Senior Fellow
February 21, 2012
Bloomberg.com

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A weak labor market, like the one we've experienced since the financial crisis in 2008, imposes enormous stress on people. Given the added anxiety created by a weak economy, you might think life expectancy would decline. Oddly, though, during recessions, exactly the opposite tends to happen: Life expectancy rises.

It's happening again now.

The age-adjusted death rate in the U.S. declined by 2 percent from 2007 to 2010, according to preliminary data from the Centers for Disease Control and Prevention. As a result, projected life expectancy at birth rose to 78.7 years in 2010 from 77.9 years in 2007, an increase of 0.8 year.

In contrast, from 2004 to 2007, when the economy was much stronger, life expectancy rose by only 0.4 year.

Life expectancy appears to have risen more in the states with relatively large increases in unemployment. In Michigan and Illinois, for example, where joblessness rose much more than in North Dakota or Iowa, age-adjusted death rates have had a steeper decline since 2007. (In the states with the smallest increase in unemployment, the death rates have perversely risen.)

These cross-state data are consistent with historical patterns that economists Douglas Miller, Marianne Page, Ann Stevens and Mateusz Filipski have found. Their research shows that a one-percentage-point increase in a state's unemployment rate is associated with a 0.5 percent reduction in the state's mortality rate.

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