RecessionsHealth · Recessions, labour-market uncertainty and health

Recessions, labour-market uncertainty and health

The aim of the project was to provide a comprehensive analysis of how individual health is affected (both in the short and in the long-run) when recessions cause uncertainty on the labour-market. To achieve this aim, I exploited major European recessions as well as particularly rich administrative data. The two objectives of the project were to answer the following policy-relevant questions: (i) Do recessions at career entry negatively affect health over the life-course – and in particular in the long-run? (ii) Do individuals who experience major labour-market uncertainty during by recessions suffer from health disorders in the short-run? These questions were both timely and appealing from a policy point of view, as the current 2008 Great recession had generated massive uncertainty on the labour-market; the youth, in particular, had disproportionately suffered, and young cohorts who began their careers in the late 2000s had experienced major difficulties accessing employment. Due to the early termination of the project, only the first objective was addressed. To address this objective, I have collaborated with Prof. Skans and Dr. Engdahl (both Uppsala University and IFAU, two leading institutions in labour economics) and exploited a unique set of Swedish linked administrative data over 1986-2013. The observational period (1986-2013) provided the required exogeneous variation in macroeconomic conditions – here the 1990s Swedish Great Recession – to identify the effects of interest. It allowed taking a life-course perspective, from career entry up to 19 years later. Our identification strategy relied on sharp and sizeable increases in unemployment rates from one year to another, where students were exogeneously pushed in the labour-market in different years. The specific objectives within objective (i) were twofold: (a) to produce a causal estimate of recession at career entry on hospitalization and mortality hazards over the life-course (from graduation year up to 19 years later (b) to understand the underlying mechanisms – in terms of labour-market and family formation – in the relationship of interest. Due to data availability and the early termination of the project, we addressed (b), but (a) only partly.

Data: CORDIS, © European Union