The High Ultimate Cost of COVID-19 Unemployment

With untold millions of workers around the world finding themselves on the wrong side of the employment equation thanks to governments' attempts to "flatten the COVID-19 curve" by shuttering the economy, a look at the impact of unemployment on physical and mental health is in order.  After the Great Recession, many public health researchers around the world looked at the potential for links between the stress caused by unemployment and health.  In this posting, I will touch on some of the research that has been done, showing us what we can expect from the COVID-19 related economic shutdown.

1.) A study entitled "Job Displacement and Mortality: An Analysis Using Administrative Data" by Daniel Sullivan and Till Von Wachter looked at the impact of job displacement on mortality among Pennsylvania's high-tenure workers who leave companies that are experiencing large declines in employment (i.e. mass layoffs affecting at least 30 percent of the company's work force).  The study found the following:

"Our estimates suggest a 50%–100% increase in the mortality hazard during the years immediately following job loss. The estimated impact of displacement on annual mortality rates declines substantially over time, but appears to converge to a 10%–15% increase in the hazard rate. If these increases lasted beyond the 25-year window we follow, they would imply a loss in life expectancy of 1.0–1.5 years for workers displaced in middle age. In contrast, we find little effect of job loss on mortality for workers displaced near retirement age."

The authors found that there was at least a 10 percent to 15 percent increase in the annual probability of dying that persisted for at least the next 20 years after the worker was laid off.  Over an indefinite period of time, there would be a loss in life expectancy of between one and one and one-half years for a worker who was displaced at the age of 40.

2.) A study by Clemens Noelke and David E. Bell at the Harvard Center for Population and Development Studies examined the health impact of job loss during recessions.  This research focuses on American workers aged 50 and older between 1992 and 2010 and looks at health indicators including mortality rates, cardiovascular disease, cognition, depression and unhealthy behaviours like smoking and alcohol consumption.  The authors are focussing on older workers because it is more difficult for them to find new work and because they already tend to have pre-existing health conditions.  While the final results of the study are currently being peer-reviewed, the authors expect that the results will show that there is a causative link between job loss and health.

3.) A study entitled "Losing Life and Livelihood: A Systematic Review and Meta-Analysis of Unemployment and All-Cause Mortality" by David Roelfs et al looked at the magnitude of the risk and moderating factors that affect the mortality of unemployed persons.  The study looked at 235 mortality risk estimates from 42 studies which provided data on more than 20 million people.  The study found the following:

"Unemployment was associated with a 73% increased risk of all-cause mortality for people under the age of 40 years who were in their early careers and a 77% increased risk for those between the ages of 40 and 50 years who were in mid-career. The association was substantially reduced for those between the ages of 50 and 65 years who were near the end of their working careers, falling to only 25 percent."

Overall, the risk of death was 63 percent higher among those who experienced unemployment than among those who did not after adjusting for age and other variables.  The magnitude of the association between unemployment and mortality is higher for men (78 percent) than women (37 percent).

4.) A study entitled "Job Loss and Health in the U.S. Labor Market" by Kate Strully examined how job loss impacted the health of American workers using data from the 1999, 2001 and 2003 waves of the U.S. Panel Study of Income Dynamics (PSID) which  collects data on both employment and health.  Health was measured using three variables; fair/poor health, likely health conditions (conditions that are likely to respond to a recent event like job loss i.e. stroke, hypertension, heart disease, heart attack, diabetes and emotional or psychiatric problems) and unlikely health conditions (conditions that are unlikely to respond to a recent even like job loss i.e. lung disease, cancer, loss of memory or mental ability).  The fair/poor health measure is based on a self-assessment scale in which respondents describe their health as excellent, very good, good, fair or poor.    

The report found the following:

1.) Being fired or laid off increases the odds of reporting fair or poor health by 80 percent.

2.) Losing a job because of establishment closure increases the odds of reporting fair or poor health by 54 percent.  Among respondents with no preexisting health conditions, it increased the odds of a new likely health condition by 83 percent.

3.) Only 6 percent of people with steady jobs developed a new health condition over the time between PSID surveys compared to 10 percent of those who had lost a job over the same timeframe.  The increased rate of developing a new health condition also did not improve fro the 10 percent rate even if the workers had found new employment.

What I found quite fascinating is that a number of these studies appear on the National Institutes of Health website.   Keep in mind that the National Institute of Allergy and Infectious Diseases which is part of the NIH is headed by Dr. Anthony Fauci, the lead player in America's program to defeat the COVID-19 virus and it is largely under his guidance that tens of millions of Americans find themselves unemployed.

Research clearly shows the link between reduced lifespan and increased health problems and unemployment.  Certainly, some of the jobs that have been lost during the recent shuttering of the economy will return once things return to the "new normal", whatever that might be, but there is no doubt that many businesses will fail, leading to the prospect of long-term unemployment for untold millions of American workers.  We are all part of a massive social experiment which will prove very costly even when the COVID-19 deaths are not included.