Macroeconomic Crunches During Working Years and Health Outcomes Later in Life

32 Pages Posted: 5 Mar 2015

See all articles by Liudmila Antonova

Liudmila Antonova

Ca Foscari University of Venice

Tabea Bucher-Koenen

ZEW – Leibniz Centre for European Economic Research; Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)

Fabrizio Mazzonna

University of Lugano - Institute of Microeconomics and Public Economics; Munich Center for the Economics of Ageing (MEA); Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Social Law and Social Policy

Date Written: December 19, 2014

Abstract

We investigate the long-term effects of macroeconomic crises experienced during prime working age (20 to 50) on health outcomes later in life using data from eleven European countries. Experiencing a severe crisis in which GDP dropped by at least 1% significantly reduces health later in life. Specifically, respondents hit by such a shock rate their subjective health as worse, are more likely to suffer from chronic diseases and mobility limitations, and have lower grip strength. The effects are larger among low-educated respondents. Experiencing a crisis year decreases the probability of being in good health later in life equivalent to being two years older in the overall sample or four years older in the low-educated subsample. Highly educated respondents' health is not affected by economic crises and additionally economic booms have a positive effect on their health. An analysis of critical periods in life reveals that in particular crises experienced later in the career (between age 40 and 50) matter for health. Extensive robustness checks show that our results are not driven by general improvements in health during the post-war years.

Keywords: SHARE, Health, Macroeconomic Conditions, Long-run Effects

JEL Classification: I15, J14, N14

Suggested Citation

Antonova, Liudmila and Bucher-Koenen, Tabea and Mazzonna, Fabrizio, Macroeconomic Crunches During Working Years and Health Outcomes Later in Life (December 19, 2014). Max Planck Institute for Social Law and Social Policy Discussion Paper No. 20-2014. Available at SSRN: https://ssrn.com/abstract=2560185 or http://dx.doi.org/10.2139/ssrn.2560185

Liudmila Antonova (Contact Author)

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

Tabea Bucher-Koenen

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA) ( email )

Amalienstrasse 33
Munich, 80799
Germany

HOME PAGE: http://mea.mpisoc.mpg.de/

Fabrizio Mazzonna

University of Lugano - Institute of Microeconomics and Public Economics ( email )

Switzerland
+41 58 666 4787 (Phone)

HOME PAGE: http://www.usi.ch/en/personal-info?id=2299

Munich Center for the Economics of Ageing (MEA) ( email )

Amalienstraße 33
München, 80799
Germany

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Social Law and Social Policy ( email )

Amalienstraße 33
München, 80799
Germany

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