Business cycle impacts on health behaviors.

• Author: Dave, Dhaval
• Position: Research Summaries

The unemployment rate more than doubled in the United States during the Great Recession, from 4.4 percent to 10 percent, imposing a heavy financial burden on households. However, whether such economic downturns also impose a health burden is a subject of much debate. Exploiting area-level variation in measures of labor demand, a large literature, starting with Chris Ruhm's seminal work, has explored how the business cycle affects population health. (1)

While it may be intuitive to suppose that population health would improve with the macroeconomy, the evidence is surprisingly murky. Some adverse health effects of economic downturns are direct and undisputed, such as increases in psychological stress, depression, and related illnesses, while others are indirect and less clear. Some studies indicate that health is countercyclical, with various measures of mortality, including those from cardiovascular disease and motor vehicle fatalities, declining with reduced economic activity, while others find the opposite.

None of these studies of the link between labor demand and health outcomes presume a direct effect. Rather, the presumption is that labor demand affects workers' environment (for instance, pollution or crowding) or their behavior (for instance, physical activity, diet, tobacco and alcohol use), which then affects health. Health effects may take time to materialize, making it challenging to identify them empirically in the short term. Thus, it is important to examine the intermediate links, that is, effects on health behaviors, which may respond more readily than health itself to changes in households' time and income constraints over the economic cycle. Examining these proximate pathways also is important for judging the validity of the prior, at times contradictory, evidence on health.

Consider, for instance, the various studies that assess whether area-level unemployment affects obesity. It is presumed that unemployment leads to a change in energy expenditure and/or energy intake, which in turn affects bodyweight. While some studies find that obesity decreases during recessions, others find the opposite, and still others find no consistent effects. Many of these studies use similar methods and data sets. Thus, additional evidence bearing on the separate links in the causal chain would help assess the credibility of the link between labor demand and obesity. Similarly, research has examined the effects of labor demand on heart disease, with one presumed causal pathway being that unemployment leads to less physical exertion which leads to fewer heart attacks.

In a series of papers with Gregory Colman and Inas Kelly, I examine how labor demand affects health behaviors, in order to shed light on the effects of the economic cycle on health.

Energy Expenditure and Time Use

Prior evidence on the effects of unemployment on energy expenditure has been confined to recreational exercise, and has been inconsistent. While recreational exercise is certainly an important behavioral outcome, it constitutes only about 4 percent of total physical activity. Furthermore, in a study with Henry Saffer, Michael Grossman, and Leigh Ann Leung, I find significant substitution across recreational exercise, work-related physical activity, and other modes of activity. (2) Thus, it cannot be presumed that, because exercise improves health, if unemployment increases exercise it must also improve health. It is total physical activity, not just recreational exercise per se, which is the salient input into the individual's health production function.

Colman and I study whether shifts in labor demand induce individuals to become more or less physically active. (3) We exploit within-state variation in gender-specific employment ratios matched with detailed time diary information from the American Time Use Survey (ATUS) over 2003-10, a period which included the Great Recession. The ATUS is based on a national sample drawn from the Current Population Survey (CPS) and tracks all activities undertaken by the respondent in the past 24 hours. For each activity, in addition to duration, we measure intensity using the Metabolic Equivalent of Task (MET). A unit of MET is defined as the ratio of a person's working metabolic rate relative to his resting metabolic rate. (4) By combining information on the duration of each activity with its MET value, we are able to group activities and also to construct a standardized and consistent measure of total physical activity or exertion during the day.

Figure 1, which compares unadjusted means before and...