The business cycle, health behavior, and chronic disease: A study over Three decades

Abstract

The effect of macroeconomic fluctuations on individual health remains highly debated. We estimate the effect of the business cycle on health and health behavior in the U.S. using the NLSY79 panel data for 11,406 respondents between 1979 and 2014. Most of our survey respondents have no chronic illness in 1979, and develop these conditions during the sample period. This allows us to estimate the true effect of economic fluctuation on the likelihood of developing chronic conditions. The results indicate a considerable difference in the cyclic variation of chronic diseases. After controlling for innate individual characteristics such as family health history, and unobserved regional characteristics, we find that obesity decreases during economic downturns, while diabetes, hypertension, and congestive heart failure increase. Sub-sample analyses show that Blacks are more likely to develop diabetes and hypertension and are less likely to develop obesity during economic downturns than other racial groups. The incidence of obesity declines during recessions for women, while males are more likely to develop diabetes. Income loss, particularly among Blacks, and lack of change in physical activity mediate these differential effects.