If Work Doesn’t Kill You…

The economic crises of 2008 left millions jobless throughout the United States and Europe, and high unemployment rates still persist five years later. Several studies have established that job loss tends to cause large and persistent loss of earnings among displaced workers, while other studies have shown that recessions can actually improve health in the aggregate in developed countries. Few studies, however, have looked at the effect of job loss on individual health. In “Losing Heart? The Effect of Job Displacement on Health“, economists Sandra E. Black, Paul J. Devereaux, and Kjell G. Salvanes studied Norway’s detailed administrative data to examine how job displacement affects cardiovascular health.

Researchers combined employment and demographic data from the Norwegian Registry from 1988 to 2006 with health data from two population surveys that examined Norwegian citizens around their 40^th birthdays. Both of the health datasets included a background questionnaire on behaviors as well as a physical examination. Due to Norway’s comprehensive population surveys, researchers had panel data on employment status for individuals in all years that could be matched with detailed health data from a single examination for any given individual.

Researchers compared average health outcomes for those identified as suffering a job displacement through firing or plant closure with a control group of workers who remained employed throughout the study. They used a difference-in-differences technique to examine relative changes in health outcomes after a displacement, which accounted for the fact that health data only existed for any individual worker at one point in time. The research design controlled for a variety of characteristics including education level, IQ, and earnings before displacement and was able to isolate the effect of job loss on several health outcomes. These included an indicator for heart disease from the Framingham Risk Score, as well as measures of cholesterol levels and whether the individual smoked.

Workers who experienced job loss tended to have shorter job tenure and less education than the control group, but were otherwise similar. On average, researchers found job displacement caused a statistically significant increase in the Framingham Risk Score for both men and women. Most of this occurred due to changes in behavior; holding other factors constant, job displacement increased the likelihood an individual was a smoker by two percent for men and three percent for women. Displacement also appeared to increase cholesterol levels for both men and women, although this was not statistically significant. Researchers found little evidence of health or behavioral spillover effects onto the spouses of displaced workers. The hardest hit workers, identified as those whose plant shut down, saw their cardio-vascular risk increase most dramatically.

The researchers identified measurable impacts on health, though two to three percent increases in smoking rates may not appear very dramatic. The authors suggest a need for additional research on the impact of unemployment on individual outcomes. Researchers lacked access to before- and after-job-loss health data on individuals, which could have more clearly identified the individual effects of job loss. Additionally, Norway’s generous social benefits including high unemployment insurance and universal health-care may reduce the financial and health impact of job displacement and suggest that this study’s results represent a lower bound on the effect of job losses on health. A comparable study in the US, where unemployment often results in loss of health insurance and a large decrease in expected future earnings, might find more substantial health effects. Policy-makers should take into account the potential for costly changes in the health of vulnerable populations during times of high unemployment.

Feature Photo: cc/Danya Vershinin