Australia’s unemployment rate went from 5.3% in 2019 to 7.5% in July 2020, and growth is minus 7% for the June quarter which is the worst ever recorded.
Hospitality and travel have been smashed and in general the economy is poor. Does this mean that our health will suffer as well? The surprising truth is that recessions normally have a positive overall health benefit.
The Great Depression of the 1930’s is the most severe depression in the last 100 years. At its peak unemployment hit 23% in the U.S. and gross domestic product (GDP), shrunk by 14%. Despite these hardships, the average American was healthier during this period than during the economic booms that preceded and followed it.
Jose Tapia Granados has found that deaths related to flu and pneumonia, fell from about 150 per 100,000 people in 1929 to roughly 100 per 100,000 people in 1930. Suicide was the only cause of death that increased during the Great Depression. For life expectancy there was a six-year increase in life expectancy, and this was even greater among non-whites, who had an eight-year increase.
Graph: Life expectancy and economic growth
The same is repeated over time and across countries. Garry Egger and Boyd Swinburne cover the story of when the Russians withdrew aid from Cuba in 1989 in Planet Obesity. The country went broke and the calorie intake went down by 1000 cal or 4000 joules per day, which is about 30 – 50% of the normal intake. Obesity declined 50%, heart disease by 35%, stoke by 18% and all-cause mortality by 20 percent.
What about more recent evidence? We can look at what the Americans call the Great Recession and what Australians call the Global Financial Crisis from 2007 – 2010. For European countries, with each increase of 1% in their national unemployment rate they had a corresponding 0.5% reduction in their rate of age‐adjusted mortality.
This is seriously counterintuitive and what could be the reason? Jose Granados thinking is that economic booms are associated with more smoking, drinking, overeating, over consumption of all sorts, less sleep, and more work-related stress, which are all factors that can affect health. In addition, traffic-related deaths and industrial injuries tend to increase during periods of economic growth and decrease during recessions. Lowered production also means less air pollution. Another factor involves social support, with more free time to come together, and social support networks tend to be healthier.
The big exception of course is mental health and suicide. Professor Ian Hickie of the Mind and Brain Centre, at the University of Sydney, modelling suggests the COVID-19 crisis could lead to a 25 per cent jump in the suicide rate if unemployment doubles from 2019 levels to 11 per cent. Hopefully, the employment will stay well below these levels, but if the estimates are correct then this would result in an additional 750 deaths.
However, the Great Depression (1930), the Cuban economic collapse (1989) and the Great Recession (2009) were not caused by pandemics. None of these recessions required people to go into quarantine, social distance, or shut down areas where people socialise, such as restaurants and concerts. The increase in social connection seems to be one of the key drivers for the health improvements seen during recessions. A COVID recession may not result in the same level of health improvement that we have seen in the past.