Public health in a recession

Dr David Stuckler
Saturday, 11 July 2009

The What is crime? project brings what is invisible to the surface. Crime can evolve before our eyes every day, but it is often unrecognised. For example, during the food crisis last year, where investors made decisions to buy rice futures, rice prices shot up by about 200 per cent, leading to mass poverty and millions being plunged to the brink of starvation. But this has virtually been forgotten.

Often major financial events that are beyond our control bring us everyday scenes that we consider to be `crime' or `violent'. The effect of financial crises on our lives is not widely appreciated. Rising unemployment and rising stress are reflected in the conditions in which we live, in which we're born, in which we work. This in turn determines how long our lives are, what we die from and how happy we are. The consequence is a kind of institutional violence where it's hard to see who the perpetrators are. In some parts of Glasgow, life expectancy is 54 years. On average, that's about a decade less than people in India living on less than $2 a day can expect to live. That's a massive difference in life expectancy. And it has nothing to do with healthcare, nothing to do with income; it has to do with the society in which we are born and in which we live, work and are raised.

How do financial crises affect our health? Unlike some government statistics, such as crime statistics, mortality data are unambiguous. There are accurate data on the numbers of heart attacks, suicides and homicides that take place each year. Public health affects large parts of the population and not just to a small degree. It can kill more people than something very concentrated that heavily affects a small number of people.

A financial crisis is a bit like this. Everyone is at risk, everyone is exposed, much like swine flu, but the difference is that we don't know how a financial crisis will affect our health. Everybody seems to have an opinion on it, in particular the media. For example, the BBC has referred to the current financial crisis as `econicide', in caricature, that bankers are killing millions of people throughout the world. The Lancet has said that we can expect to see rises in suicides and intentional deaths. However, there might be a benefit of the recession - when people aren't as rich, they don't go to eat as much, they walk instead of drive, they use public transportation; overall, we might be better off.

However, this perspective can be misleading. To understand how a financial crisis affects the population, you have to think about who's affected. The people who keep their jobs or the people who are going to lose their jobs? And what are the causes of their mortality? Are we talking about heart attacks, diabetes or influenza? Will there be an immediate consequence or will it be delayed? There is also the question of where in the world a crisis occurs. In Iceland there would be a different impact than if a crisis took place in India or in Bangladesh where more people are vulnerable and social protections are weaker.

There have been three major crises in the past century - the Great Depression, the post-communist depression and the East Asian financial crisis - which might offer some clues as to the impact of a financial crisis.

During the Great Depression, income dropped by about 30 per cent in a couple of years, and it is assumed that suicide rates shot up because of the images of people jumping out of bank windows. What may come as a surprise is that there's a kernel of truth to the story that mortality improved as income fell. This evidence comes from US data but there was a similar pattern in the UK - death rates fell quite sharply by about 10 per cent. Some might look at this and say the financial crisis saved hundreds of thousands of lives in the USA. On the other hand, suicide rates rose by about 50 per cent. However, while each suicide is a tragedy, because they are quite rare events (last year there were perhaps 3,500 suicides in the UK), they were far outweighed by other reductions in mortality.

During the same period as the Great Depression in the USA there was Prohibition when alcohol wasn't easily available. After the ban was lifted in 1933, deaths related to alcohol shot up quite sharply, just as mortality rates started picking up and also GDP came back.

This leads us to the next case, the worst peacetime mortality crisis in the past half-century: the transition to capitalism in the former Soviet Union. The events of the 1990s were dramatic. Rapid social change led to a sharp rise in suicides, again about 50 per cent, just as GDP plummeted by 30 per cent. But in this recession death rates shot up overall by 20 per cent, the opposite of what was seen in the Great Depression. What were the key differences? First, alcohol in the Soviet system was widely available and highly toxic. During this period people were drinking colognes and perfumes that contained about 90 per cent ethanol. It was a way that desperate people were able to bring about their self-destruction. Second, Soviet style safety nets were radically swept away. At the time, politicians were afraid that the Soviet Union would reform, so they implemented radical economic policies to try to get rid of many of the social institutions that protected people from cradle to grave.

In the East Indian crisis of the late 1990s, many countries borrowed from the International Monetary Fund. These loans involved strict conditions that led some to scale back their social safety nets. These countries had greater rises in suicides and deaths overall than those that didn't make these changes.

The data tell us that recessions can kill you but also that there are things governments can do to protect you from harm. People have the means of their own destruction. When social support is limited, it helps in hard times to have friends you can count on, particularly when social protections and crucial social safety nets such as family support policies, childcare services, housing supports and unemployment benefits are swept away. In Japan, there was a high rise in suicides part of which has been attributed to Japan scaling back social safety nets.

Looking at the experiences of countries in the European Union over the past 30 years, and in particular at what happened when unemployment rose and fell in the UK, what was the effect on suicide rates? What happened when unemployment went up or down? Did heart attack rates rise, or fall?

Data from previous financial crises predict fairly reliably what happened. With a 1 per cent rise in unemployment, suicide rates rose by about 0.8 per cent and homicide rates rose by about 0.8 per cent. On the other hand, numbers of road traffic fatalities and transport accidents dropped. This is entirely consistent with what we have seen before: when unemployment rose rapidly by 30 or 40 per cent in the Great Depression, suicide rates rose in step. On the other hand, people got off the roads, there was less traffic, fewer lorries, people took public transport, which is much less risky, and road traffic fatalities went down. This consequence brings the most benefits for the demographic group I focused on between ages under 40 road traffic accidents are the leading cause of death, especially for men.

In the early 1990s, unemployment shot up by about 10 per cent in Sweden but suicides marched steadily downward; there was no effect. In Spain, on the other hand, which had similar periods where unemployment went up or down suddenly, the suicide rate moved along with it, and the rates were more closely related. Social protections introduced by governments can make a difference. It is those who are already vulnerable, like migrants or refugees, who are going to be much more exposed when times are hard.

For example, in Sweden, more money is spent on labour market protections to help people. Research shows that when people lose their jobs there's a critical 12-month period during which attempts can be made to give them hope, to help them get back on their feet and help them cope with the negative mental impacts of unemployment. However, most of the mental distress and suffering continues for two more years. This may be due to the way our society emphasises how important it is to have a job and to not be lazy, and how it puts pressure on people. So much of our lives and well-being are wrapped up in our work. Work provides a sense of who you are, an identity. Even if there are not many jobs available that give people a reason to wake up in the morning and something to look forward to, employment can have a crucial impact on well-being.

One interesting finding in the literature is that, in terms of the risk of suicide, losing your job is not as bad for you as just being afraid of losing your job. Some populations are more vulnerable, and we looked to the UK to try to extend some of the social safety nets that can make a difference. What we found was that each additional £70 or so would bring down the effect of unemployment on suicide by about 0.4 per cent. The point is that when you spend more than £140 per head of population, rising unemployment has no effect on suicide .

Well, what does this mean? To put it in perspective, Britain spent about £18,000 per person on bailing out the bank system to keep suicides from rising. Britain would just need to spend less that 1 per cent of that on programmes to help people quickly get back into jobs.

People losing jobs in manufacturing and the motor industry are the ones really at risk, not those working in banks and the financial sector. Even with the available research evidence there is no public outcry or demand for protections to be put in place for ordinary people whose lives are literally at risk. I worry the most about people in their mid-40s with families. These are the people who are going to have a tough time getting appropriate jobs or any job if they lose their job during the crisis, and the government has been almost silent on that demographic.

It is not just about trying to find a perpetrator. I am not saying that Gordon Brown is killing millions of British people by cutting social spending. I am saying that an additional £50 per head in Britain could save many lives, hundreds if not thousands. We estimated that, if nothing changes, the financial crisis will lead to about 300 additional suicides in Britain. That's just the tip of the iceberg. We can't measure all the failed suicide attempts. We can't measure the mental distress that we see in this kind of picture. But the data don't lie and many people say this crisis is different and could be even worse, especially if we scale back on social safety nets.

It is tricky with the inequality in society. It's not necessarily the inequality that people are more spread out but who's more affected and who's more vulnerable.

This is an edited transcript and It is based on research published in July 2009, Stuckler, D., Basu, S., Suhrcke, M/, Coutts, A. and McKee, M., 'The public health effect of economic crises and alternative policy responses in Europe: an empirical analysis', The Lancet Vol 374 No. 9686 pp315-323.