what is the evidence of the impact of the economic crisis...
TRANSCRIPT
What is the evidence of the impact of the economic crisis on mental
health?
David Stuckler, PhD MPH
Oxford and LSHTM
With
Marc Suhrcke, Sanjay Basu, Adam Coutts and Martin McKee
Disaster? Blessing?
“Econocide to surge as
recession bites”
– BBC Mar 2009
“Recession is a lifestyle
blessing in disguise”
– Times Oct 2008
Great Depression… not so bad?
FSU Depression… devastating
Rising Suicides
Great Depression FSU Depression
-1 suicide:10 suicide attempts:100 cases depression
EU Financial Crisis-Mortality
1% rise in unemployment associated with:
- 0.8% ↑Suicide
- 0.8% ↑Homicide
- 1.4% ↓Traffic death
No effect on all-cause mortality
Source: Stuckler et al 2009 Lancet
Some populations more vulnerable
10
15
20
25
Un
em
plo
ym
en
t Ra
te (L
abour F
orc
e S
urv
eys)
89
10
11
12
Suic
ide R
ate
s p
er
10
0,0
00 (
un
de
r 6
4)
1980 1985 1990 1995 2000 2005Year
Suicide Male Unemployment Rate
Average Labour Market Protection: $88 per head
Spain
24
68
10
Un
em
plo
ym
en
t Ra
te (L
ab
ou
r Fo
rce
Su
rve
ys)
15
20
25
30
Suic
ide R
ate
s p
er
10
0,0
00
(u
nd
er
64)
1980 1985 1990 1995 2000 2005Year
Suicide Male Unemployment Rate
Average Labour Market Protection: $362 per head
Sweden
24
68
10
12
Un
em
plo
ym
en
t Ra
te (O
fficial)
6.5
77.5
88.5
Suic
ide R
ate
s p
er
100,0
00 (
unde
r 64)
1970 1980 1990 2000 2010Year
Suicide Unemployment Rate
Average Labour Market Protection: $95 per head
United Kingdom
Social Protections Help…
Each 100 USD greater social spending reduced the effect on suicides by:- 0.38%, active labour
market programmes
- 0.23%, family support
- 0.07%, healthcare
- 0.09%,unemployment benefits
Spending> 130 euro no effect of
unemployment on suicide
Source: Stuckler et al 2009 Lancet
Lessons?
Social Protection
Drugs and Alcohol
Social Cohesion
Recommendations
1) Social and health stimulus
(indebted, unemployed, low SES, migrants, Roma)
If budget cuts:
2) Ringfence labour market protections
3) Ringfence health services
4) Protect mental health services
5) Protect vulnerable groups
An opportunity for whom?
Appendix
Source: Hanley 1931 Life
Great Depression:not so bad?
Sources: NYT Oct 1930; AP 1932; WP 1930
Post-Soviet Depression: devastating
Rising Unemployment
Alcohol and Surrogates
Prisons and Tuberculosis
Overview
- Income↓ 30%
- Suicide ↑about 40%
- All-Cause Mortality Rates ↑ 20%
But important variations:
Worse in countries with: - rapid economic change, - weak social protections, - low social capital
Cuba, Finland:- Incomes fell but health stable
Source: Stuckler et al 2009 Mass privatisation and the post-communist mortality crisis Lancet
Russia & Belarus
IMF Programs and TB Control
- Gov Spending↓ 8%
- Doctors ↓ 8%
- Directly Observed Therapy avg. ↓ 40%
- TB incidence ↑ 17%
Source: Stuckler et al 2008 IMF Programs and Tuberculosis outcomes PLoS Med
East Asian Financial Crisis: it depends
Sources: Hopkins 2006 Health Policy; Chang 2009 Soc Sci Med
Implications for Europe?
1) Social spending to re-integrate and prevent job loss appears effective
2) Effects not as bad as some suggest
3) Potential long-term health effects (nutrition)
4) Vulnerable groups at greater risk (within-country inequality)
5) Vulnerable populations, budget cuts (e.g. IMF programs)
Rhetoric or reality?
-“Grave debt crisis”; “public finances out of control”
BUT-Debt/GDP lower than US, France, Germany, EU average-About same as 10 years ago
AND- Temporary deficits OK
UK Debt
Dow and Deficit
Future Research?
1) Evaluate Prohibition & New Deal
2) Investigate East Asian Crisis
3) Iceland, nutrition & dietary change
4) Health co-benefits to social protections
5) Study IMF programs effects
6) Speculative finance and commodity bubbles
Stuckler, D., S. Basu, M. Suhrcke, A. Coutts, M. McKee. 2009. The public health effect of economic crises and alternative policy responses in Europe: an empirical analysis. The Lancet. 374(9686):315-23
Stuckler, D., L. King, and M. McKee. 2009. Mass privatization and the postcommunist mortality crisis: a cross-national analysis. The Lancet. 373(9661): 399-407
Stuckler, D, S. Basu, M. Suhrcke, A. Coutts, M. McKee. 2009. The health implications of financial crisis: A review of the evidence. Ulster Medical Journal. 78(3): 142-5
Lock, K., D. Stuckler, K. Charlesworth, M. McKee. 2009. Potential causes and health effects of rising global food prices. British Medical Journal. 339:b2403
Stuckler, D and S. Basu. 2009. The International Monetary Fund's effects on global health: before and after the 2008 financial crisis. International Journal of Health Services. 39(4): 771-81.
Stuckler, D., S. Basu, and L. King. 2008. International Monetary Fund programs and tuberculosis outcomes in post-communist countries. Public Library of Science Medicine 5(7): e143
Stuckler, D., L. King and A. Coutts. 2008. Understanding privatisation's impacts on health: Lessons from the Soviet Experience. Journal of Epidemiology and Community Health 62(7): 664.
Stuckler, D., S. Basu, M. McKee, L. King. 2008. Mass incarceration can explain population increases in TB and multi-drug resistant TB in European and central Asian countries. Proceedings of the National Academy of
Sciences. v105(36):13280-5.
Stuckler, D., C. Meissner and L. King. 2008. Can a bank crisis break your heart? Globalization and Health 4(1):1-12.
Stuckler, D. 2008. Population causes and consequences of leading chronic diseases: A comparative analysis of prevailing explanations. The Milbank Quarterly 86(2):273-326.
Some Underlying Publications
I. Great Depression
When the full record of the year 1931 is written, no chapter will be more striking than the one dealing with public health. The country was in the grip of the most serious industrial depression in a generation...By all the signs and all the precedents, hard times so seriously prolonged should have brought in their train disease and death.
Actually, 1931 was one of the healthiest years in the history ofthe country. The evidence is overwhelming.
– New York Times, Jan 5th, 1932
Empirical Setup
Sample and Period: 114 U.S. Cities, 1929-1937
‘Shock’: Bank Suspensions: Federal Deposit Insurance Corporation– percentage of banks suspended in calendar year
Mortality: U.S. Bureau of the Census – Crude death rates for >30 causes– Epidemiology: city-level, weighted U.S. urban populations– Econometric: state-level, weighted U.S. state means
Economic and Demographic Controls:–Urbanisation Rates, Literacy Rates, Percentage Black Ethnicity, Age-structure
Fixed Effects + Hodrick Prescott Filter
Thanks to Price Fishback for collecting data
Immediate Causes of Death
Privatisation & Mortality
Unemployment: A mediating factor
Adjustment for unemployment reduces privatisation coefficient by :-10% (mass privatisation program) - 25% (1 unit on EBRD scale)
Social Capital: A protective factor
Empirical SetupSample and Period: 26 Postcommunist CEE and FSU Countries, 1991-2002
‘Shock’: Mass Privatization: EBRD and WB– transferring at least 25% of large-state owned enterprises to the private
sector within 2 years– jump from 1 to 3 on EBRD large-scale privatisation index
Mortality: WHO and UNICEF– Age-standardised mortality rates in working-age men (15-59) – Life expectancy, alcohol-related mortality rates, suicide rates
Economic and Demographic Controls: WB, EBRD, ILO– Price liberalisation, Trade liberalisation, GDP per capita, Democratisation
Index, Dependency Ratio, Urbanisation Rates, Education Levels
ittiitititit XPRIVAMR ε+η+µ+θλ+β+β+α=
Two Way Fixed Effects + Control Function
Clue #3: Immediate Causes: Heart Attacks, Accidents, Suicides
Clue #4: Healthcare Collapse?
0
100
200
300
400
500
600
700
1965 1975 1985 1995
Year
dea
ths/1
00,0
00
Russia
UK
• Death rate from avoidable
mortality in UK and Russia
similar in 1965, when little
could be done
• Gap began to widen in
1970s, and has continued to
do so since
• It rose rapidly in the early
1990s before falling back
“Despite economists’ reputation for never being able to agree on anything, there is a striking degree of unanimity in the advice that has been provided to the nations of Eastern Europe and the former Soviet Union (FSU). The legions of economists who have descended on the formerly Communist economies have provided advice very similar … The three “-ations”—privatization, stabilization, and liberalization —must all be completed as soon as possible.”
Lawrence Summers (1994: 252-253)
Shock Therapy versus Gradualism
Potential Health Effects of Mass Privatization
Mass Privatization
Mass Unemployment ↑ Adult mortality
Reduced Social Provision
Firm Failure
“… I was the person sent to Russia to live in the factories and feed back information to the bank. I spent months in the factories. In one, I slept in an empty ward in the sanatorium. I realised very quickly that the master plan of privatising Russian industry overnight was going to impose huge costs on
hundreds of thousands of people. These factories were producing goods that once they were launched, no one would want in a too competitive market. They would have to slash tens of thousands of jobs. But also, these factories provided
schools, hospitals, health care and retirement - cradle to grave. I raised these concerns in Washington, to say there weren't any safety nets in place. It became clear to me that it was really a political play, that they wanted to take assets out
of the state's hands, so the Communist Party wouldn't come back.”-- WB administrator overseeing Mass Privatization in Russia
↑ mortality
↑ mortality
Russia & Belarus
68
69
70
71
Life
Exp
ecta
ncy a
t B
irth
(ye
ars
)
1991 1994 1997 2000Year
Mass Privatizers Non Mass Privatizers
Data Source: WHO European Health for All Database 2007
Postcommunist CountriesMass Privatization and Life Expectancy
Table 2. Effect of Privatization on Male Life Expectancy in
Transition Countries, 1991-2002
Covariates (1) (2) (3)
Mass Privatization -1.58
(0.23)*** – –
EBRD Average
Privatization Index –
-0.49
(0.18)** –
EBRD Cumulative
Privatization Index – –
-0.03
(0.03)
Log(GDP per capita) 1.61
(0.30)***
1.81
(0.30)***
1.79
(0.35)***
EBRD Price
Liberalization Index
-0.22
(0.15)
-0.26
(0.14)
-0.28
(0.15)
Heritage Foundation
Democracy Index
0.24
(0.05)***
0.25
(0.06)***
0.22
(0.06)***
Military Conflict -0.74
(0.29)**
-0.64
(0.30)*
-0.63
(0.31)*
Percentage of
Population Urban
-0.63
(0.14)***
-0.45
(0.13)***
-0.39
(0.14)**
Population
Dependency Ratio
-0.08
(0.08)
-0.15
(0.06)
-0.16
(0.07)*
Percentage of
Population with
Tertiary Education
-0.01
(0.01)
-0.02
(0.02)
-0.01
(0.02)
Table 3. Effects of Mass Privatization and Log GDP per Capita on Log Male Death Rates
in 25 Transition Countries by Age, 1991-2002
Covariates Infanta Under-5a 5-14 15-59 60+
Mass Privatization 2.92%*
(1.44)
2.00%
(1.49)
0.20%
(0.95)
13.51%***
(2.31)
1.32%***
(0.38)
Log GDP per
capita
-0.10%***
(0.01)
-0.11%***
(0.01)
-0.05%***
(0.01)
-0.14%***
(0.03)
-0.02%**
(0.01)
Working-Age Men
Web Annex A2. Effects of Mass Privatization and Log GDP per Capita on Pathways of Population Health Impacts
Note: Robust panel-corrected standard errors in parentheses. Results presented from seven separate regression models. Two-way fixed effects models, using Prais-
Winsten transformation to adjust for country-specific serial correlation, control for the effects of EBRD price liberalization index, occurrence of military conflict, percentage of population urban, age-dependency ratio, and percentage population with tertiary education.
* = p<0.05, ** = p<0.01, *** = p<0.001 (two-tailed tests).
Determinant Alcohol
Consumption
(Liters per Capita)
Log Male Alcohol Death
Rates
Log Male Heart Disease
Death Rates
Log Male
Suicide Rates
Homicide
Rates
Log Male Unemployment
Rates
Log Crime
Rates
Mass Privatization 0.81
(0.24)*** 14.64% (4.21)**
5.98% (1.85)***
16.86% (4.51)***
5.60 (1.85)**
44.83% (13.62)***
4.19% (4.13)
Log GDP per Capita -0.04
(0.30)
-0.11%
(0.06)
-0.10%
(0.02)***
0.04%
(0.08)
-0.88
(2.45)
-0.66%
(0.15)***
-0.23%
(0.05)***
Path Analysis: Alcohol and Unemployment
Job Loss & Health: Evidence from RLMS
- Hazard Dying: ↑~3-4-fold
- Odds Excess Vodka: ↑40%
Who loses jobs?
- 40% higher risk at private firm
Chance job loss next year:10.4% if privatized9.1% if Russian private7.9% if foreign6.2% if state
62
63
64
65
66
67
68
69
70
71
1970 1980 1990 2000 2010
Life expectancy at birth, in years
Inaccurate and Misleading Data
Russia’s regions: pace of economic change and LE
Table 3. Vodka consumption per capita
Year Belarus Russia
1990 3.6 3.6
1991 4.4 4.1
1992 4.8 3.8
1993 5.9 4.9
1994 5.6 5.5
1995 5.5 7.0
1996 6.4 5.5
1997 6.2 5.5
1998 5.8 6.0
1999 5.1 6.5
2000 4.2 6.5
2001 3.8 6.3
2002 3.7 6.2
2003 3.2 6.2
Table WB7. Effect of Male Adult Mortality and Life
Expectancy on Log GDP per Capita
Health Measure Effect on Log GDP per Capita
Adult Male Mortality Rates -0.45%***
(0.12)
Male Life Expectancy 0.04***
(0.01) Note: Coefficients calculated as semi-elasticities presented; Robust standard errors in
parentheses. Models also control for EBRD price-liberalization index, EBRD trade
liberalization index, democratization, population dependency, the percentage of
population living in urban settings, education rate, and country-specific fixed effects.
Significance at * p-<0.05, ** - p<0.01, *** - p<0.001
0 0.2 0.4 0.6 0.8 1
Belarus
Russia
Ukraine
Estonia
Latvia
Lithuania
England & Wales
W Germany
Women
Men
Probability of surviving from 20 to 60
Covariates Model 1:
Physicians
Model 2:
Nurses
Model 3:
Dentists
Model 4:
Hospital
Beds
Model 5:
Inpatient
Admissions
-0.15* -30.31 -3.92** -0.72** 0.08 Mass Privatization
(0.07) (16.32) (1.37) (0.20) (0.36)
0.10 -44.31* 4.00** 0.22 2.05** GDP
(0.07) (18.61) (1.47) (0.22) (0.41)
0.07** 18.21** 0.41 0.32** 0.74** Urbanization
(0.02) (5.23) (0.42) (0.06) (0.11)
-0.01 6.21* 0.70** 0.16** 0.11 Dependency
(0.01) (2.66) (0.22) (0.04) (0.06)
0.11 37.99 -1.89 1.53** 2.98** Fertility
(0.11) (23.81) (2.01) (0.33) (0.58)
-0.06 -18.40 1.24 -0.31** -0.34 Price Liberalization
(0.03) (8.69) (0.70) (0.10) (0.19)
0.00 0.81 0.16** -0.01** 0.11** Education
(0.00) (0.72) (0.06) (0.00) (0.02)
Number of
Observations (NxT)
286 296 299 278 303
Number of
Countries (N)
26 25 25 26 26
R2 0.93 0.94 0.96 0.94 0.96
Note: Models 1 scaled per 1,000 population, Models 2-4 per 100,000 population,
Model 5 per 100 admission; Constant not reported; Fixed Effects with country effects
presented, period effects do not alter results; Prais-Winsten transformation used to
accommodate AR(1) error structure; * = p<0.05; ** = p<0.01 (two-tailed tests)
Health Resources
In writing about Stalinism, John Maynard Keynes observes that “We have a fearful example in Russia today of the evils of insane and unnecessary haste. The sacrifices and losses of transition will be vastly greater if the pace is forced…”
Yale Review, 1933
IV. Recessions in Europe
This paper was produced for a meeting organized by Health & Consumers DG and represents the views of its author on thesubject. These views have not been adopted or in any way approved by the Commission and should not be relied upon as a statement of the Commission's or Health & Consumers DG's views. The European Commission does not guarantee the accuracy of the dataincluded in this paper, nor does it accept responsibility for any use made thereof.