Do Recessions during Working Age affect Health in Later Life?
Using SHARE data from eleven countries, Liudmila Antonova, Tabea Bucher-Koenen and Fabrizio Mazzonna investigate the effects of economic crises that people experience during their prime working age (20-50) on their health later in life. The results show that when comparing individuals that experienced a strong recession (GDP dropped by at least 1%) and those that did not, people that experienced a recession rate their subjective health as worse and have worse objectively measured health. This effect is significantly stronger for people with low levels of education. Furthermore, individuals seem to be particularly vulnerable if they experience an economic crisis later in their career between the age of 41 and 50. Also the number of crises seems to be relevant: The effect of experiencing one additional crisis is approximately equivalent in size to becoming two years older. In order to understand possible underlying mechanisms, the authors investigate labour market trajectories and find that low educated men and women are much more likely to drop out of the labour force in times of economic crises. While men retire early, women are more likely to become homemakers. These results indicate that early retirement in times of recessions is related to negative long-term consequences for health, which makes the policy reaction of easing access to early retirement during severe recessions highly questionable.