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. –
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.
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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.