Recessions, Unemployment, and Mental Health

Postdoctoral Fellow Jie Chen
About This Project

Headshot of postdoctoral fellow Jie Chen in front of a black chalkboard backgroundBy Gita Smith

In a recently published paper, Jie Chen, a postdoctoral fellow at Georgia Tech’s Health Economics and Analytics Lab in the School of Economics, and her coauthors examine how economic conditions in U.S. cities affect health outcomes. Specifically, they looked at the effects of economic fluctuations on self-reported health, access to medical care, and health behaviors.

Despite the extensive literature on the relationship between economic conditions and individual health, the conclusions are mixed. Unemployment may give people more time for physical activities but may also reduce people’s spending on quality food. Chen and her colleagues advance the understanding of the business cycle-health nexus through the use of the CDC’s 2004-2017 Behavioral Risk Factor Surveillance System data, with a focus on the urban and small-town level. Their results suggest strong associations between worsening economic conditions (higher unemployment rates) and reduced access to care and health insurance coverage.

They also examine how unemployment affects mental health outcomes: a one percent increase in the unemployment rate raises the probability of experiencing mentally unhealthy days by 2.3 percent among non-college-educated individuals. This adds to the growing literature on detrimental mental health effects of recessions. Finally, the use of even preventive care dips when economic conditions worsen: one-percentage-point increase in unemployment rates is found to raise the probability of not being able to afford a doctor by 3.5 percent and lowers the probability of having an annual physical checkup by 0.5 percentage points.

Chen's article was published in 2021 Health Economics: Read more Featured Projects in the School of Economics.