Are recessions good for your health? : Evidence from Norway

Abstract

This study is motivated by the finding provided by Ruhm in the Unites States. He found that the mortality rate increases by 0.5% when the unemployment rate decreases by 1%. This finding surprised many researchers because they previously hypothesized that people are healthier during the economic upturns. Based on Ruhm’s interesting finding, some researchers suggest that traffic accident may be a dominant reason for that. According to these findings, in this study, attempt is made to investigate whether the total mortality rate increases when the unemployment rate decreases in Norway and, if so, whether traffic accident is a dominant reason for that. We disentangle these questions by using panel data across the Norwegian counties observed from 1977 to 1998. The panel data allow us to examine the impact of the unemployment rate on the total mortality rate as well as the rate of traffic victims as holding constant the regional characteristics and time trend. For this empirical analysis, we mainly apply Ordinary Least Squares (OLS) regression model by using STATA. We found that the total mortality rate for senior individuals (over age 67) increases when the unemployment rate decreases in Norway. On the other hand, the total mortality rate for children and working-age individuals (age from 0 to 15 and age from 16 to 66, respectively) is not influenced by the unemployment rate. Furthermore, we also found that traffic accident is not a dominant reason for this finding among senior individuals. Instead, traffic accident is one of the factors which can increase the total mortality rate for senior individuals with small magnitude when the unemployment rate decreases in Norway.