Leatherhead Matters

 The Bank of England says we’re on the brink of recession. This new paper shows why we should care. Quite simply, people born in recessions die earlier than those born in booms – around 15 months earlier.
This is not because the poverty inflicted by recessions causes greater childhood mortality. This result holds for those who reach the age of 40 – mainly because people born in recession are more prone to cardio-vascular disease. It seems that conditions in childhood or even in the womb – either family stress or poorer nutrition – have long-lasting effects.
There are three implications of this.
1. It means recessions matter. Of course, it doesn’t follow that the solution is to manage the “business cycle” better (pdf). It might instead mean we should try harder to pool economic risks. Recessions happen because 2% of people suffer a 50% drop in income rather than because 100% suffer a 1% fall. In theory, this sort of thing is insurable.
2. It adds to evidence that conditions in childhood, or even earlier, matter for adult development. We can put this paper alongside some of James Heckman’s work on skill and health formation.
3. It suggests that the correlation between social class and health is due at least in part to causation from poverty to ill-health.  Further evidence on this is the factthat people who move “up” from one class to another die earlier on average than those who stay in a high class.
* The results come from a study of twins in Denmark. Of course, because twins put greater stress upon family resources, one would expect the impact of recession upon twins to be greater than that upon the single-born. But this doesn’t mean the latter is zero.

From: Stumbling and Mumbling