Commentary: The economic business cycle and mortality

Abstract

1 of 2 Correspondence: Eric Neumayer, Department of Geography and Environment. London School of Economics and Political Science, Houghton Street, London WC2A 2AE, UK. E-mail: e.neumayer@lse.ac.uk liked to see in Tapia Granados a more detailed discussion of issues such as the way in which the percentage deviation from trend was computed, the potential use of different and more advanced time-series estimation techniques or of the problem of autocorrelation. Concerning the latter, the result from regression theory that in the presence of autocorrelation the estimated coefficients remain unbiased, invoked by the author, is only true as long as the variables are strictly exogenous. However, the assumption of strict exogeneity is problematic in the face of mounting evidence on the effect that health has on economic outcomes.9 In terms of future research, we need more efforts in two directions. First, we need more evidence from individual rather than aggregate data. Second, we need more research on the channels through which economic expansions negatively affect health. On both accounts, Ruhm10,11 provides seminal contributions, but much more is needed despite the fact that such efforts are data-intensive and work-intensive. We need to understand better why recessions lower overall mortality rates to an extent that the well-documented negative health effects of recessions for certain sub-groups of the population, particularly the unemployed, are more than compensated. This relates to the proper policy conclusions drawn from Tapia Granados’ and similar findings. Surely, just because mortality is lower in economic recessions does not mean that recessions are desirable from a health perspective. Instead, we need to focus on how the negative effect of economic upturns on mortality rates can be mitigated, if not avoided. Much attention has been paid to the negative health effects of recessions for the unemployed and other sub-groups of the population and to the mitigation of these effects. Rightly so. But maybe it is time to focus much more on how to mitigate the negative health effects of economic upturns.