Economic Cycles, Employment and Health: Disentangling Causal Pathways in a Cross-National Study

Principal Investigator: Dr Mauricio Avendano (Kings College London)

Dr Mauricio Avendano

Research in economics suggests that business cycles are associated with population health: Physical health deteriorates during economic expansions and improves during recessions. At odds with these findings, research in epidemiology suggests that in the long-run, individual unemployment and job insecurity are associated with poor health and higher mortality. Studies on the impact of economic cycles have been hampered by the lack of individual panel data to unravel causal mechanisms.

This project aims to advancing understanding by examining the short-term and long-term effects of historical economic fluctuations on individual health. The project expands previous research by exploring potential mechanisms, identifying heterogeneous effects across individuals, and comparing countries with distinct welfare policies and institutions.

The research approach is based on a unique linkage of historical data on macroeconomic cycles with:

(a) detailed life history event and panel micro-data on employment and health for 18 countries recently collected in the Survey of Health, Ageing and Retirement in Europe (SHARE), the English Longitudinal study of Ageing (ELSA) and the US Health and Retirement Survey (HRS)

(b) mortality registry data individually linked to occupational histories from national census for entire populations in five European countries in the period 1960-2005

(c) US survey-mortality linked data from the Panel Survey of Income Dynamics (PSID).

First, the project examines short-term effects of economic cycles on health in fixed effect models. Second, it assesses long-term effects of economic cycles on health using duration and instrumental variable models; exploring potential mechanisms; assessing effect heterogeneity; and examining the role of policies and institutions. The project integrates insights and methodologies from epidemiology and economics, elucidating the pathways through which economic fluctuations influence health in societies with different institutions.