Since the beginning of the pandemic, I've gotten more than a little tired of the whole economy vs. public health debate. Especially when lockdowns were new, the media seemed to have this lazy public-health-experts-favour-lockdowns vs. economists-argue-against-lockdowns theme going on. But what if both sides were wrong? Lockdowns may save lives from coronavirus, but reduce preventive healthcare and diagnosis of medical problems like cancer, which might result in more deaths overall. Not having lockdowns may reduce the economic impact from business closures, but what about the economic impact of increased death and illness from coronavirus? I think it will take us a while to disentangle everything, and hopefully we'll know better for next time.
In the meantime, here's something else to think about. In this discussion paper from late last year, Kadir Atalay, Rebecca Edwards, Stefanie Schurer, David Ubilava (all University of Sydney) looked at the relationship between the business cycle and mortality, using annual state-level data from Australia over the period from 1979 to 2017 (see also the non-technical summary on The Conversation). Interestingly, past research has shown that there is a negative relationship between unemployment (a measure of the business cycle) and mortality - that is, mortality is higher when the economy is doing better and unemployment is lower. That might seem surprising at first, but Atalay are able to confirm this relationship with their Australian data, but only for a subset of age groups:
Overall, we find no effect of unemployment on all-cause mortality... A 1 p.p. increase in the unemployment rate is associated with a zero impact on mortality (-0.02 percent and statistically insignificant). The effect is likewise statistically insignificant when estimated separately for men and women...
We observe that mortality is procyclical for the youngest age group (0-24 years) in the pooled sample (-1.8 percent, p-value<0.05) and for men (-1.9 percent, p<0.10) and women (-1.5, p-value<0.10) separately. Hence, there are fewer deaths in times of economic growth for the young. For those 25-64 years and 65 years of age and older, we do not observe any significant relationship.
Drilling down further into the five-year age groups, they find that it's essentially a result of men aged 20-39 years, as shown in their Figure 4, Panel A:
Notice that the only statistically significant bars are among the age groups 20-39 years. The corresponding figure for women shows no statistically significant effects. So, what is going on here? Atalay et al. next look at cause-specific mortality, and find that:
...higher unemployment is associated with fewer vehicle accident (road) deaths. An increase in the unemployment rate by 1 p.p. is significantly associated with a 6 percent decrease in transport accidents (p-value<0.05)... The number of lives saved are five time [sic] larger for men (73 fewer deaths) than for women (15 fewer deaths).
In other words, mortality is positively associated with the business cycle, that effect is concentrated among young men, and is driven by changes in the number of motor vehicle accidents. The mechanism seems clear - when the economy is doing better, people drive more, and that increases the risks of accidents, injuries and deaths. That is both interesting and plausible. However, Atalay et al. then probably over-reach in their conclusion:
Our findings allow us to propose an estimate for the likely impact of the recession associated with the pandemic and the Great Lockdown on mortality. If unemployment rates rise from the February 2020 rate of 5.1 percent to 10 percent as predicted by the Reserve Bank of Australia, we would expect almost 425 fewer deaths due to vehicle transport accidents. This reduction in the number of deaths is equivalent to approximately 30 percent of all transport accidents in 2017.
Although lockdowns did create a snap recession in Australia, and people drove less because they were confined to home, there is no reason to believe that the relationship observed over the period 1979 to 2017 would continue to hold. The pandemic period really is an out-of-sample event. However, we should take this as suggestive evidence in favour of lockdowns reducing mortality, and through a mechanism that isn't directly related to coronavirus.
No comments:
Post a Comment