Insights

Recessions do NOT cause more deaths

All those people protesting against COVID-19 restrictions can sit down now. This paper suggests economic recessions actually save lives.
The post Recessions do NOT cause more deaths appeared first on Motley Fool Australia. –

whether recessions cause deaths represented by docotor checking heart rate of upturned piggy bank

The public debate this year on COVID-19 restrictions has followed the dilemma that it’s a choice between death by disease or death through recession.

Lockdowns and crowding restrictions save lives by minimising the spread of the coronavirus, as well as the flu and cold.

Opponents claim those same measures also kill people through an economic downturn — unemployment causes misery, triggers family violence, and causes suicides.

University of New South Wales associate professor, Gigi Foster, took this line of argument, polarising public opinion after appearances on ABC’s Q&A panel show.

“Even with a very, very extreme epidemic in Australia we are still potentially better off not having an economic lockdown in the first place, because of the incredible effects that you see not just in the short run but in many, many years to come,” she said in April.

“I know it’s invisible lives and it’s difficult to imagine that when we aggregate, for example, all of the health effects, all of the mental health effects, all of the effects of people right now who have illnesses other than COVID-19.”

Now a new academic study has actually quantified whether recessions do indeed kill more people than at other times.

Recessions actually save lives

A recently published University of Sydney paper seems to have put to bed the argument that economic downturns cost lives.

The study found that there is no relationship between Australian unemployment rates and death rates between 1979 and 2017.

Specifically, it found no significant rise in suicide levels at times of economic hardship.

In fact, periods of high unemployment actually saved lives by reducing motor vehicle accident rates.

Incredibly, for each percentage point increase in unemployment, 70 lives are saved per year.

The theory is that young men, the demographic most vulnerable to road deaths, drive less without a job.

The 2020 COVID-19 recession would end up preventing 425 road deaths, the study estimates. This could even be an underestimation as this recession has seen a far more dramatic decrease in road traffic than other downturns.

The Bureau of Statistics has also found this year Australia has suffered far lower deaths from non-COVID causes. Infections like influenza and the common cold have not had a chance to spread as wildly as normal.

The authors point out their results are similar to findings in other studies from the United States, Germany, France, Canada, the OECD and Asia-Pacific.

Why are people healthier during economic downturns?

Some reasons why recessions could be good for wellbeing were theorised by economist, Christopher Ruhm, in his paper Are Recessions Good for Your Health

“He argued that while economic downturns usually come with financial hardship, they leave people with more time to seek treatment, socialise, care for their relatives, and engage in healthier lifestyles,” said the University of Sydney academic.

“Fewer hours commuting mean fewer road accidents and fewer hours at work mean fewer workplace accidents.”

Ruhm’s research also found smoking and obesity increase when the economy runs well, perhaps because people have more disposable income.

The one crucial difference between the Australian and US findings was that, in America, vulnerable demographics like very young children and elderly people do suffer higher death rates during economic downturns.

The fact that Australia avoids this fate is attributed to access to universal health care, which Americans do not possess.

These Dividend Stocks Could Be Your Next Cash Kings (FREE REPORT)

Motley Fool Australia’s Dividend experts recently released a brand-new FREE report revealing 3 dividend stocks with JUICY franked dividends that could keep paying you meaty dividends for years to come.

Our team of investors think these 3 dividend stocks should be a ‘must consider’ for any savvy dividend investor. But more importantly, could potentially make Australian investors a heap of passive income.

Don’t miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.

Click Here For Your Free Stock Report

Returns As of 6th October 2020

More reading

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Recessions do NOT cause more deaths appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!