There's a reason governments spend so many taxpayer dollars digging their economies out of recessions. Families lose their homes. Children go malnourished. New grads spend years struggling to get their careers back on track, forgoing marriage and kids and homeownership. But a growing body of research suggests that recessions are good for at least one thing: longevity. Puzzlingly, it appears that economic downturns actually extend people's lives.
The latest evidence comes from "Lives vs. Livelihoods," a new paper by four researchers led by the renowned health economist Amy Finkelstein. They found that during the Great Recession, from 2007 to 2009, age-adjusted mortality rates among Americans dropped 0.5% for every jump of 1 percentage point in an area's unemployment rate. The more joblessness, the longer people lived — especially adults over 64 and those without a college education.
"These mortality reductions appear immediately," the economists concluded, "and they persist for at least 10 years." The effects were so large that the recession effectively provided 4% of all 55-year-olds with an extra year of life. And in states that saw big jumps in unemployment, people were more likely to report being in excellent health. Recessions, it would seem, help us stay fitter, and live longer.
The question, of course, is why. The economists ruled out a lot of possible explanations. Laid-off workers weren't using their free time to exercise more, or cutting back on smoking or drinking because money was tight. Infectious diseases like influenza and pneumonia kept right on spreading, even though fewer people were going to work and dining out. Retirees didn't seem to be getting better care, even though rising unemployment rates made it easier for nursing homes to staff up. So what could the explanation be? How does higher unemployment lead to longer life?
The answer was pollution. Counties that experienced the biggest job losses in the Great Recession, the economists found, also saw the largest declines in air pollution, as measured by levels of the fine particulate matter PM2.5. It makes sense: During recessions, fewer people drive to work. Factories and offices slow down, and people cut back on their own energy use to save money. All that reduced activity leads to cleaner air. That would explain why workers without a college degree enjoyed the biggest drops in mortality: People with low-wage jobs tend to live in neighborhoods with more environmental toxins. It would also explain why the recession reduced mortality from heart disease, suicide, and car crashes — causes of death all linked to the physical and mental effects of PM2.5. Overall, the economists found, cleaner air was responsible for more than a third of the decline in mortality during the Great Recession.
An economy firing on all cylinders creates more jobs — but it also generates all sorts of unseen but harmful side effects.
The new paper, along with other research into recessions, provides an important reminder that economic growth isn't — and shouldn't be — the only measure of our collective well-being. If recessions save lives, that comes with a corollary: Boom times cost lives. An economy firing on all cylinders creates more jobs — but it also generates all sorts of unseen but harmful side effects. "Our findings suggest important trade-offs between economic activity and mortality," the authors conclude. That's economist-speak for two very bad choices: Would you prefer wealth that kills you, or poverty that keeps you alive?
It's that dilemma that has given rise to what's known as the degrowth movement — the idea that the gross domestic product doesn't provide us with an accurate read on human progress. Sure, economic growth provides jobs. But it doesn't tell us anything about the health of our children or the safety of our neighborhoods or the sustainability of our planet. What's the point of having all this money, the degrowthers ask, if it's making us worse off?
I'm sympathetic to that line of reasoning — up to a point. But I don't think that actually shrinking the economy, as some degrowthers advocate, is a good idea. Lower growth inevitably leads to higher unemployment, and that's not a trade-off we should be willing to accept. I grew up in Japan, a country degrowthers often point to as a model for slower growth. It's true that Japan is politically stable, clean, and safe even though its economy has stalled for 30 years. But there's something about long-term economic stagnation that saps a country's hope. Nothing changes — in politics, in culture, in society — even when everyone knows it's bad. Without realizing it, I had settled into this national inertia, the belief that nothing could be done. It was only in 2012, when I moved to San Francisco, that I started to feel real agency over the direction of my life. Everyone around me believed they could change the world, and the sense of optimism was contagious.
The degrowth movement presents us with a false choice. The solution to bad growth isn't less growth. It's better growth. With stronger regulation and smarter innovation, I'm confident we can find ways to create jobs without destroying the environment and shortening our lives. If the new research tells us anything, it's that we still have a long way to go in striking a healthy balance between economic growth and social welfare. We shouldn't have to choose between working and living.
Aki Ito is a chief correspondent at Business Insider.