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Addressing the unemployment-mortality conundrum: Non-linearity is the answer

Author

Listed:
  • Giorgio Bonamore
  • Fabrizio Carmignani
  • Emilio Colombo

Abstract

The effect of unemployment on mortality is the object of a lively literature. However, this literature is characterized by sharply conflicting results. We revisit this issue and suggest that the relationship might be non-linear. We use regional (NUTS 2) data from 23 European countries to estimate a multivariate regression of mortality. The estimating equation allows for a quadratic relationship between unemployment and mortality. We control for various other determinants of mortality at regional and national level and we include region-specific and time-specific fixed effects. The model is also extended to account for the dynamic adjustment of mortality and possible lagged effects of unemployment. We find that the relationship between mortality and unemployment is U shaped. In the benchmark regression, when the unemployment rate is low, at 3%, an increase by one percentage point decreases average mortality by 0.7%. As unemployment increases, the effect decays: when the unemployment rate is 8% (sample average) a further increase by one percentage point decreases average mortality by 0.4%. The effect changes sign, turning from negative to positive, when unemployment is around 17%. When the unemployment rate is 25%, a further increase by one percentage point raises average mortality by 0.4%. Results hold for different causes of death and across different specifications of the estimating equation. We argue that the non-linearity arises because the level of unemployment affects the psychological and behavioural response of individuals to worsening economic conditions.

Suggested Citation

  • Giorgio Bonamore & Fabrizio Carmignani & Emilio Colombo, 2014. "Addressing the unemployment-mortality conundrum: Non-linearity is the answer," Working Papers 281, University of Milano-Bicocca, Department of Economics, revised Oct 2014.
    • Handle: RePEc:mib:wpaper:281
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    1. Toffolutti, Veronica & Suhrcke, Marc, 2019. "Does austerity really kill?," Economics & Human Biology, Elsevier, vol. 33(C), pages 211-223.
    2. Laliotis, Ioannis & Stavropoulou, Charitini, 2018. "Crises and mortality: Does the level of unemployment matter?," Social Science & Medicine, Elsevier, vol. 214(C), pages 99-109.
    3. Maddalena Cavicchioli & Barbara Pistoresi, 2020. "Unfolding the relationship between mortality, economic fluctuations, and health in Italy," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(3), pages 351-362, April.
    4. Nikolaos Antonakakis & Rangan Gupta, 2017. "Is Economic Policy Uncertainty Related to Suicide Rates? Evidence from the United States," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(2), pages 543-560, September.

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    More about this item

    Keywords

    unemployment; economic crisis; mortality; Europe;
    All these keywords.

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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