Unemployment and Health Behaviors over the Business Cycle: A Longitudinal View

We examine the first‐order internal effects of unemployment and nonemployment on a range of health behaviors during the most recent recession using longitudinal data from the Panel Study of Income Dynamics and the National Longitudinal Survey of Youth‐1979. Ours is the first study to analyze the effect of own‐unemployment on energy intake, energy expenditure, and the net effect (body mass index) using longitudinal records. Exploiting information enveloping the recent steep recession and prolonged recovery is valuable since recent job losers will modify their behavior little if they expect soon to be re‐employed, whereas if they expect joblessness to last, they will adjust to a possibly prolonged decline in income and increase in nonwork time. We find that becoming unemployed is associated with a small increase in leisure‐time exercise, a moderate decrease in smoking, and a substantial decline in total physical activity. We also find that unemployment and nonemployment are associated with a decline in purchases of fast food. Together, these results imply that both energy consumption and expenditure may decline in the United States during recessions, the net result being essentially no change in body weight. There is considerable heterogeneity in these effects across specific health behaviors, across the intensive and extensive margins, across the outcome distribution, and across gender.