The Great Recession, financial strain and self-assessed health in Ireland

Gintare Mazeikaite,Cathal O’Donoghue,Denisa M Sologon

doi:10.1007/s10198-018-1019-6

Abstract

In this paper, we study the effects of the 2008 economic crisis on general health in one of the most severely affected EU economies—Ireland. We examine the relationship between compositional changes in demographic and socio-economic factors, such as education, income, and financial strain, and changes in the prevalence of poor self-assessed health over a 5-year period (2008–2013). We apply a generalised Oaxaca–Blinder decomposition approach for non-linear regression models proposed by Fairlie (1999, 2005). Results show that the increased financial strain explained the largest part of the increase in poor health in the Irish population and different sub-groups. Changes in the economic activity status and population structure also had a significant positive effect. The expansion of education had a significant negative effect, preventing further increases in poor health. Wealthier and better educated individuals experienced larger relative increases in poor health, which led to reduced socio-economic health inequalities.

Highlights

The Great Recession that started in 2007 has been the most severe economic downturn since the 1930s [76]
Examining the drivers of the observed health changes may provide evidence for future policy responses aimed at safeguarding population health in times of economic crisis. We address this gap in the literature by examining how structural changes in the economy affected population health in one of the hardest hit countries by the Great Recession—Ireland—over a 5-year period (2008–2013)
We find that the increase in the prevalence of poor self-assessed health in Ireland can be largely attributed to the negative changes in socio-economic factors, in particular, the increase in financial strain, which followed the collapse of the housing bubble

Summary

Introduction

The Great Recession that started in 2007 has been the most severe economic downturn since the 1930s [76]. A large body of literature that finds adverse effects of unemployment, income shocks and poor living conditions. We address this gap in the literature by examining how structural changes in the economy affected population health in one of the hardest hit countries by the Great Recession—Ireland—over a 5-year period (2008–2013). The global economic recession coupled with the collapse of the property bubble and the banking crisis prompted the Irish government to seek a loan from the International Monetary Fund (IMF, European Commission and European Central Bank), which came with strict austerity policies that put further pressures on the economy [43, 44, 53]. Due to the fall in private and public investment, the employment rate in Ireland dropped from 69% in 2007 to 59.4% in 2010 after being one of the highest in the EU

Results

Discussion

Conclusion