The Ιmpact of Business Cycles on Health Status in the United States During the Past Half-Century

Abstract

Abstract The association between mortality and business cycle is inconclusive. Most macro level studies find mortality to be pro-cyclical whereas micro level studies suggest the opposite. The consensus among these studies, however, is on the use of unemployment rate as a proxy for cyclical variations in economic activity. This study builds upon these findings by implementing an alternative proxy – per capita income – to better understand such a mediating relationship. Using state level annual data of the United States during 1968-2022, this study finds a negative association between state per capita income and mortality rate. Contrary to the findings of macro level studies, this analysis suggests that mortality declines during expansions. The results are robust to the inclusion of both old and new proxies for the business cycle. JEL Codes: E24, E32, I15. Keywords: Health, Mortality, Unemployment, Income.