For several years, University of North Carolina-Greensboro economist Christopher J. Ruhm has been digging up data he claims support that counterintuitive and controversial hypothesis. He published a study in 2000 estimating that a 1 percent rise in unemployment reduced the death rate by 0.5 percent.
Now, in a paper recently published by the National Bureau of Economic Research in Cambridge, Ruhm digs deeper into the numbers and tries to explain why.
His conclusion: When jobs are scarce, both unemployed workers and those who keep their jobs (but perhaps with less to do) behave in a healthier manner. They're more likely to exercise, and less likely to eat out or skip doctors' appointments. Also, during a slump, it's the heaviest smokers and most obese who change their behavior.
The idea flies in the face of conventional wisdom, including work by Johns Hopkins University researcher M. Harvey Brenner suggesting the downturns of the early 1970s and 1980s harmed health.
Ruhm, working with data stretching from 1972 to 2000, says his numbers suggest the reverse, though with two big caveats.
First, he readily admits mental health does not necessarily fit the same pattern. And second, the emphasis of the study is "temporary" economic downturns. In the long run, he says, economic growth is indisputably good for health.
"My strong belief is that moving from Bangladesh to the United States is very good for your health," he said. "There's no question about that."
But long-term growth comes from technology, and technology doesn't develop at a regular pace. In the short term, technology may not improve productivity fast enough, so people make up the difference by working longer, more stressful hours. When work is more pressing, and even more rewarding, there's an increase in the "opportunity cost" of doing anything else - including exercising, seeing a doctor and taking the time to cook a healthy meal.
Ruhm makes the comparison to pollution. In the long-run, economic growth produces new technologies that pollute less, but those technologies emerge intermittently, and in the short run there can be more pollution during a boom.
"Some of those byproducts (of growth), particularly in the short run, are bad for your health," he said.
Admittedly, the data show small changes, but mostly in the same direction. Ruhm concluded an increase of 1 percent in a state unemployment rate reduces smoking, obesity and physical inactivity rates by 0.6 percent, 0.3 percent and 1.8 percent, respectively. Intriguingly, the effects were even stronger for those who remained employed.
Such studies demonstrate the growing interest of economists in questions of whether people behave rationally when it comes to their well-being. Why, for instance, have obesity rates in the U.S. risen so sharply over the past 25 years, despite general prosperity?
But nobody's found much success understanding the relationship between the health of the economy and the health of individuals.
That's because it's virtually impossible to isolate so many causes from so many effects. Laid off workers, for instance, may lose their insurance but may gorge on medical care just before it expires; prosperous workers have more options for a healthier lifestyle (like gym memberships) but also more temptations (like vacations that lead to sunburn).
"When people have had trouble finding a relationship or it goes counter to what they expect, part of the problem may be it's just so devilishly hard to measure," said Dr. Alan Garber, director of the Center for Health Policy at Stanford University. Garber is director of the health care program for NBER but said he had not read Ruhm's latest paper.
Ruhm acknowledges many people dismiss his theory, saying his formulas can't account for all the relevant factors. But he insists his complex statistical methodology answers many of those concerns.
"It's not uncommon for me to hear, 'I looked at your work, I can't find anything wrong with it, but I'm still not sure I believe it,"' Ruhm said. "I'll also hear, 'I didn't believe it but I've looked at it and I'm starting to believe it."'
By Justin Pope