A few weeks ago I got a chance to listen to Geoff Colvin talk about his new book, The Upside of the Downturn. Geoff, a long-time editor and columnist for Fortune Magazine, is an engaging speaker and he peppered his opening comments with headlines from that morning’s newspapers. He also made the intriguing claim that death rates go down in a recession and offered up as evidence that profits were down at the U.S.’s largest maker of caskets.
Several of us discussed this claim afterwards and found it hard to believe. With lower income, we expected that people would eat cheaper, less nutritious food. Unhealthy habits like smoking and alcohol seem recession-proof and might even increase. We assumed that death rates were more likely to increase during a recession.
For fun, we tried to come up with theories that would prove the claim. Perhaps high gas prices might be the cause of lower death rates. Since people drive less, they’re in fewer fatal auto accidents. Those that have to bike to work lose weight and become healthier. Alternately, perhaps fewer people can afford to eat out and make meals from scratch. These home-made meals have less saturated fat and salt which in turn improve health.
These are amusing theories but miss the point that apparently the claim is true. Christopher J. Ruhm, an economist at the University of North Carolina at Greensboro, observed the correlation in a 2003 paper, “Healthy Living in Hard Times.” Ruhm found that the death rate decreases by 0.5% for every 1% increase in the unemployment rate.
In a Fortune article, Colvin explained that the primary reason is that people without jobs have more time to exercise. Losing weight correlates with less smoking, both of which improve your health. Out of work people also have more time to sleep which in turn improves health.
The recession leads to better health and longer lives. That is the upside of the downturn.