Macroeconomic Conditions and Health in Britain: Aggregation, Dynamics and Local Area Heterogeneity

50 Pages Posted: 25 Mar 2020

See all articles by Katharina Janke

Katharina Janke

Lancaster University

Kevin Lee

University of Nottingham, UK

Carol Propper

Imperial College London Business School; Centre for Economic Policy Research (CEPR); University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO)

Kalvinder Shields

Department of Economics, University of Melbourne

Michael Shields

Monash University

Multiple version iconThere are 2 versions of this paper

Date Written: March 2020

Abstract

We estimate a model that allows for dynamic and interdependent responses of morbidity in different local areas to economic conditions at the local and national level, with statistical selection of optimal local area. We apply this approach to quarterly British data on chronic health conditions for those of working age over the period 2002-2016. We find strong and robust counter-cyclical relationships for overall chronic health, and for five broad types of health conditions. Chronic health conditions therefore increase in poor economic times. There is considerable spatial heterogeneity across local areas, with the counter-cyclical relationship being strongest in poorer local areas with more traditional industrial structures. We find that feedback effects are quantitatively important across local areas, and dynamic effects that differ by health condition. Consequently, the standard panel data model commonly used in the literature considerably under-estimates the extent of the counter-cyclical relationship in our context.

Keywords: aggregation, dynamics, health, Heterogeneity, macroeconomic conditions, Morbidity

JEL Classification: C33, E32, J10, J21

Suggested Citation

Janke, Katharina and Lee, Kevin and Propper, Carol and Shields, Kalvinder and Shields, Michael, Macroeconomic Conditions and Health in Britain: Aggregation, Dynamics and Local Area Heterogeneity (March 2020). CEPR Discussion Paper No. DP14507, Available at SSRN: https://ssrn.com/abstract=3560315

Katharina Janke (Contact Author)

Lancaster University ( email )

Lancaster LA1 4YX
United Kingdom

Kevin Lee

University of Nottingham, UK ( email )

United Kingdom

Carol Propper

Imperial College London Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO) ( email )

12 Priory Road
Bristol BS8 1TN
United Kingdom

HOME PAGE: http://www.bris.ac.uk/Depts/Economics/department/profiles/propper.htm

Kalvinder Shields

Department of Economics, University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

Michael Shields

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

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