Macroeconomic crunches during working years and health outcomes later in life | Max-Planck-Institut für Sozialrecht und Sozialpolitik - MPISOC

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11.02.2015 / Sozialpolitik (MEA) EN

Macroeconomic crunches during working years and health outcomes later in life

MEA Discussion Paper 20-2014 by Liudmila Antonova, Tabea Bucher-Koenen und Fabrizio Mazzonna



We investigate the long-term effects of macroeconomic crises experienced during prime working age (20 to 50) on health outcomes later in life using data from eleven European countries. Experiencing a severe crisis in which GDP dropped by at least 1% significantly reduces health later in life.

Specifically, respondents hit by such a shock rate their subjective health as worse, are more likely to suffer from chronic diseases and mobility limitations, and have lower grip strength. The effects are larger among low-educated respondents. Experiencing a crisis year decreases the probability of being in good health later in life equivalent to being two years older in the overall sample or four years older in the low-educated subsample. Highly educated respondents' health is not affected by economic crises and additionally economic booms have a positive effect on their health.

An analysis of critical periods in life reveals that in particular crises experienced later in the career (between age 40 and 50) matter for health. Extensive robustness checks show that our results are not driven by general improvements in health during the post-war years.

Please find the complete Discussion Paper here.