Research conducted in the 1990s concluded that both increases in unemployment
and downturns in the economy were detrimental to health (see Gerdtham and
Johannesson 2005, for a discussion of this work). In particular, it has been shown
that downturns in the economy can lead to increased psychological stress and to a
reduction in both mental and physical health (Fenwick and Tausig 1994; Dooley
et al. 1994; Turner 1995; Dooley et al. 1996). Additionally, increased levels of
unemployment have been linked to reductions in general health, including
decreased levels of happiness (Clark and Oswald 1994; Morrell et al. 1994;
Gerlach and Stephan 1996; Winkelmann and Winkelmann 1998). More generally, it
is also acknowledged that reduced levels of income (a side effect of both recessions
and increased unemployment) is associated with increases in mortality and
morbidity (Ettner 1996; Lantz et al. 1998; Smith 1999; Gerdtham and Johannesson
2004).
Recently, researchers have adopted panel data methods to analyse the relationship
between the economy and mortality. Using data from the USA, Ruhm (2000)
found that aggregate mortality, as well as eight specific causes of mortality, was procyclical
in nature. His findings have been confirmed by Laporte (2004), Granados
(2005a), and Miller et al. (2009). Also, with the help of US microdata, Edwards