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Macroeconomic Conditions and Health in Britain: Aggregation, Dynamics and Local Area Heterogeneity

Author

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  • Janke, Katharina

    (Lancaster University)

  • Lee, Kevin

    (University of Nottingham)

  • Propper, Carol

    (Imperial College London)

  • Shields, Kalvinder

    (University of Melbourne)

  • Shields, Michael A.

    (Monash University)

Abstract

We estimate a model that allows for dynamic and interdependent responses of morbidity in different local areas to economic conditions at the local and national level, with statistical selection of optimal local area. We apply this approach to quarterly British data on chronic health conditions for those of working age over the period 2002-2016. We find strong and robust counter-cyclical relationships for overall chronic health, and for five broad types of health conditions. Chronic health conditions therefore increase in poor economic times. There is considerable spatial heterogeneity across local areas, with the counter-cyclical relationship being strongest in poorer local areas with more traditional industrial structures. We find that feedback effects are quantitatively important across local areas, and dynamic effects that differ by health condition. Consequently, the standard panel data model commonly used in the literature considerably under-estimates the extent of the countercyclical relationship in our context.

Suggested Citation

  • Janke, Katharina & Lee, Kevin & Propper, Carol & Shields, Kalvinder & Shields, Michael A., 2020. "Macroeconomic Conditions and Health in Britain: Aggregation, Dynamics and Local Area Heterogeneity," IZA Discussion Papers 13091, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp13091
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    Cited by:

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    More about this item

    Keywords

    macroeconomic conditions; health; morbidity; dynamics; heterogeneity; aggregation;
    All these keywords.

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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