Economic Conditions and Health: What was the economy like when you left school?

The size of their first paycheck may not be the only concern students should have when leaving school. Recent research by Johanna Catherine Maclean of the University of Pennsylvania’s Perelman School of Medicine examines the potential long-term effects that leaving school during varying economic conditions may have on an individual’s health. Maclean finds that men who exited school during poor economic times generally have worse health conditions at age 40 than men who left school when the economy was strong. In contrast, the study reveals lower symptoms of depression among 40-year-old women who left school during poorer economic times.

Previous research has demonstrated a link between economic conditions at the time a person enters the labor market and career outcomes, finding that individuals leaving school in a poor economy experience a decrease in wages, occupational prestige, and number of promotions during their working career. Using these studies as a springboard, Maclean seeks to understand if a similar relationship exists with respect to a person’s health.

The study uses data from a health survey offered to the 1979 cohort of the National Longitudinal Survey of Youth (NLSY). This data spans an extended period, with respondents having been out of school for an average of 22 years. Participants ranged from 14 to 22 years of age in 1979, allowing for a variety of economic conditions to be accounted for at the time a respondent exited school. This approach allows for a more holistic understanding of the relationship between a person’s lifelong health and the economic conditions present at the time of their entry into the labor force.

Maclean determines a person’s health status based on responses to the survey, which measures physical functioning, self-reported health, mental functioning, and depressive symptoms. This health information is then compared to NLSY data about the economic conditions at the time respondents left school and entered the labor market. Both graduating and dropping out of school qualify as ‘leaving school’ in this study. Economic conditions are measured by the unemployment rate in each respondent’s state of residence during the time they exited school.

Maclean found that a one percentage point increase in the unemployment rate in the state of residence at the time men left school was associated with relatively small, but statistically significant, decreases in their physical and mental functioning, and increases in their depressive symptoms. The impact estimates ranged from a 0.6% to 3.5% change in these outcomes. The effect of economic conditions and health on women was statistically significant only for depressive symptoms, which were 6% fewer for every 1% increase in a state’s unemployment rate at the time of graduation.

While the outcome for men may have been expected based on prior research, Maclean proposes some interesting arguments as to why women exiting school during poor economic conditions might exhibit lower depressive symptoms. One argument is that a high unemployment rate may cause women to shift toward home production and other non-labor market activities that could have a positive impact on women’s mental health. Maclean also notes that women leaving school in a bad economy may be reticent to take on additional jobs or work hours that would lead to increased stress and consequentially have improved mental health.

Although Maclean’s study illustrates a correlation between some components of health and economic conditions at the time a person exits school, this relation cannot be confused with causality: we cannot say that a worse economy causes worse health outcomes. Perhaps it is more likely that the economic conditions at the time an individual enters the labor market affect one’s future occupational achievements. These achievements (and corresponding benefits or stresses) then may be the root of varying physical and mental health by the time a person is 40 years old.

However, Maclean’s study does provide evidence that times of economic downturn may have a substantial impact on a population’s health in unexpected ways. If nothing else, this study strengthens the argument that policymakers should provide assistance to members of the workforce after poor economic conditions, as their long-term impacts may be more problematic than previously known.

Feature Photo: cc/(chelsea chen)