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Upside of Low Employment Is Longer Life

Author: Peter R. Orszag
May 28, 2013
Bloomberg.com

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This is a morbid column about some unexpected and encouraging news: Deep economic declines, such as the one we experienced in the U.S. a few years ago, probably lengthen life expectancy. This is exactly the opposite of what most people believe.

A reasonable estimate is that for every percentage-point increase in the unemployment rate, the U.S. mortality rate drops by 0.3 percentage point. In other words, and although it runs counter to our intuition, recessions may be bad for our wallets but good for our health.

Part of the reason is that there are fewer traffic fatalities. This makes sense because there's typically less traffic when the economy slows down. From 2002 to 2007, the number of Americans dying in motor-vehicle accidents was roughly constant, at about 42,000 or so per year. By 2011, that figure had dropped by almost a quarter, to 32,367 -- the lowest since 1949, when the U.S. population was half what it is now.

Still, automobile accidents account for less than 2 percent of deaths each year, so the drop in these fatalities accounts for only a tiny part of why life expectancy improves during recessions.

The rest of the story may be explained by evidence found in three recent studies. One of these was about Iceland, which experienced a severe recession after its banking crisis in October 2008. During the bust, Icelanders abandoned various unhealthy behaviors, according to surveys conducted by the University of Iceland, Rider University and the Robert Wood Johnson Medical School in New Jersey in 2007 and 2009.

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