The Social Costs of Financial Crises

27 Pages Posted: 13 Jun 2013

Date Written: June 12, 2013


This paper studies the impact of financial crises on society. Using data on 187 banking crises in 126 countries over the period 1970-2009, I examine the impact of a crisis not only on the economy and the financial sector, but also on health, education, poverty, and gender issues. A wider-angle lens exposes broad-ranging implications for society. For example, in the six years following a crisis, average life expectancy declines by nine months, primary school enrolment drops by 3.5%, and fertility falls by 5.5% (but adolescent fertility rises by 4.5%). I also find a considerable short-run worsening of poverty and income equality, and a lasting 50% increase in outbound refugees and inbound foreign aid. Although output and employment suffer at least as much for developed countries, the social costs of financial crises are much greater for less-developed countries.

Keywords: financial crises, social costs, health, education, poverty, ender issues

JEL Classification: E32, E44, F3, N20, I1, I2, I3

Suggested Citation

van Dijk, Mathijs A., The Social Costs of Financial Crises (June 12, 2013). Available at SSRN: or

Mathijs A. Van Dijk (Contact Author)

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
PlumX Metrics