Media Briefings

RECESSIONS DAMAGES THE HEALTH OF YOUNG ADULTS: US evidence

  • Published Date: March 2015

Young people who start work during a recession are more likely to have health problems, according to research by Naijia Guo to be presented at the Royal Economic Society’s 2015 annual conference.

Using data from the US National Longitudinal Survey of Youth 1997, the study estimates the impact of a recession on health for women and men up to the age of 30 with a high school or university education. The study finds that a recession during a young person’s early career, when they are aged between 18 and 22, leads to:

• A higher probability of bad health for high school graduates, but not for college graduates.
• More depression among young men but not for young women.
• Greater adverse health behaviours (such as smoking, heavy drinking and illicit drug use) among high school graduates, but not among college graduates.
• A difference in the time spent by these groups. There is an increase in hours of sleep among male college graduates and an increase in hours watching TV and less time spent exercising among high school graduates and reduce. Among females, both groups reduce their hours of sleep.

These results suggest that the recent recession may have lasting effects on the health of a generation of young people.

More…

Using data from the restricted-access National Longitudinal Survey of Youth 1997, this study estimates the long-term impact of an early career recession on various health outcomes and health-related behaviours up to age 30 for different groups defined by gender and education.

The early career recession is measured by the unemployment rate of the graduation state in the year when the individual enters labour market on receiving the highest degree. Because the timing of labour market entry could potentially be affected by economic conditions, the unemployment rate is instrumented when entering labour market using the unemployment rates of the graduation states at age 18 and age 22.

The main findings are first, the effects of an early career recession on health outcomes and health behaviours are heterogeneous by gender and by education groups, and second, education plays a protective role to reduce the potential adverse impact of an early career recession.

In particular, an early career recession increases the probability of bad health status for high school graduates, but has no effect on college graduates. It also leads to more depression among males, but has no impact on females.

The research also finds that a higher unemployment rate at early career significantly increases adverse health behaviours such as smoking, heavy drinking and illicit drug use among high school graduates, but there is no statistically significant impact on college graduates.

In addition, different age-education groups respond differently in time use: among males, college graduates increase hours of sleep but high school graduates increase hours of watching TV and reduce exercise; among females, both groups reduce hours of sleep.

ENDS