Addressing the unemployment-mortality conundrum: Non linearity is the answer
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Author(s)
Bonamore, Giorgio
Carmignani, Fabrizio
Colombo, Emilio
Griffith University Author(s)
Year published
2015
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The effect of unemployment on mortality is the object of a lively literature. However, this literature is characterized by sharply conflicting results. We revisit this issue and suggest that the relationship might be non-linear. We use data for 265 territorial units (regions) within 23 European countries over the period 2000–2012 to estimate a multivariate regression of mortality. The estimating equation allows for a quadratic relationship between unemployment and mortality. We control for various other determinants of mortality at regional and national level and we include region-specific and time-specific fixed effects. ...
View more >The effect of unemployment on mortality is the object of a lively literature. However, this literature is characterized by sharply conflicting results. We revisit this issue and suggest that the relationship might be non-linear. We use data for 265 territorial units (regions) within 23 European countries over the period 2000–2012 to estimate a multivariate regression of mortality. The estimating equation allows for a quadratic relationship between unemployment and mortality. We control for various other determinants of mortality at regional and national level and we include region-specific and time-specific fixed effects. The model is also extended to account for the dynamic adjustment of mortality and possible lagged effects of unemployment. We find that the relationship between mortality and unemployment is U shaped. In the benchmark regression, when the unemployment rate is low, at 3%, an increase by one percentage point decreases average mortality by 0.7%. As unemployment increases, the effect decays: when the unemployment rate is 8% (sample average) a further increase by one percentage point decreases average mortality by 0.4%. The effect changes sign, turning from negative to positive, when unemployment is around 17%. When the unemployment rate is 25%, a further increase by one percentage point raises average mortality by 0.4%. Results hold for different causes of death and across different specifications of the estimating equation. We argue that the non-linearity arises because the level of unemployment affects the psychological and behavioural response of individuals to worsening economic conditions.
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View more >The effect of unemployment on mortality is the object of a lively literature. However, this literature is characterized by sharply conflicting results. We revisit this issue and suggest that the relationship might be non-linear. We use data for 265 territorial units (regions) within 23 European countries over the period 2000–2012 to estimate a multivariate regression of mortality. The estimating equation allows for a quadratic relationship between unemployment and mortality. We control for various other determinants of mortality at regional and national level and we include region-specific and time-specific fixed effects. The model is also extended to account for the dynamic adjustment of mortality and possible lagged effects of unemployment. We find that the relationship between mortality and unemployment is U shaped. In the benchmark regression, when the unemployment rate is low, at 3%, an increase by one percentage point decreases average mortality by 0.7%. As unemployment increases, the effect decays: when the unemployment rate is 8% (sample average) a further increase by one percentage point decreases average mortality by 0.4%. The effect changes sign, turning from negative to positive, when unemployment is around 17%. When the unemployment rate is 25%, a further increase by one percentage point raises average mortality by 0.4%. Results hold for different causes of death and across different specifications of the estimating equation. We argue that the non-linearity arises because the level of unemployment affects the psychological and behavioural response of individuals to worsening economic conditions.
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Journal Title
Social Science & Medicine
Volume
126
Copyright Statement
© 2015 Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence (http://creativecommons.org/licenses/by-nc-nd/4.0/) which permits unrestricted, non-commercial use, distribution and reproduction in any medium, providing that the work is properly cited.
Subject
Biomedical and clinical sciences
Economics
Health economics
Human society
Health sciences