An impact of economic slowdown on health. New evidence from 21 European countries

Abstract

BackgroundThe economic slowdown affects the population's health. Based on a social gradient concept, we usually assume that this detrimental impact results from a lower social status, joblessness, or other related factors. Although many researchers dealt with the relationship between economy and health, the findings are still inconsistent, primarily related to unemployment. This study reinvestigates a relationship between the economy's condition and health by decomposing it into macroeconomic indicators.MethodsWe use data for 21 European countries to estimate the panel models, covering the years 1995–2019. Dependent variables describe population health (objective measures – life expectancy for a newborn and 65 years old, healthy life expectancy, separately for male and female). The explanatory variables primarily represent GDP and other variables describing the public finance and health sectors.Results(1) the level of economic activity affects the population’s health – GDP stimulates the life expectancies positively; this finding is strongly statistically significant; (2) the unemployment rate also positively affects health; hence, increasing the unemployment rate is linked to better health – this effect is relatively short-term.ConclusionsSocial benefits or budgetary imbalance may play a protective role during an economic downturn.