Recessions Are Killer, Cutting Short Older Workers’ Lives, Study Finds

Recession are bad for older workers

Recessions are bad for older workers health.

Recessions can be fatal for older workers. A new study shows recession’s toll on health and reveals unexpected advantages of Social Security and Medicare for older workers, those in their 50s and 60s.

The study conducted by Wellesley College economists found that over time, a recession can have significant, adverse effects on the health of older workers. In some cases, a recession can cut life expectancy by up to three years.

However, the research revealed a silver lining for older workers: early entitlement to Social Security benefits and Medicare can buffer a recession’s negative effects.

The researchers examined four decades of mortality data, studying survival probabilities and labor market conditions that existed in the years leading up to retirement.

Key findings from the older workers study include:

  • Experiencing a recession in one’s late 50s through early 60s leads to reduced life expectancy, taking up to three years off the lives of older workers who lose their jobs.
  • Employment and income deficits associated with a recession can last years for these older workers, thus health insurance coverage and health care access also are affected for several years. These deficits may account for the reduced life expectancy.
  • The longevity of older workers who have already hit age 62, the minimum age for Social Security eligibility, are not affected, presumably because of the safety net that Social Security provides.
  • The Medicare system also helps because any ongoing deficit in health insurance associated with a recession is eliminated at age 65, when individuals become eligible for Medicare.

According to coauthor Phillip B. Levine , the study not only reveals unexpected consequences for older workers that lose their jobs, but also highlights the importance of lifelines like Social Security and Medicare.

“Those workers who are unlucky enough to approach retirement during a recession will, unfortunately, face long-term health consequences,” Levine. “The situation would likely be worse if it weren’t for the support of the Social Security and Medicare system in providing income support and health insurance for the elderly.”

The study, “Recessions, Older Workers, and Longevity: How Long Are Recessions Good For Your Health?” is coauthored by Wellesley College economists Phillip B. Levine , Katharine Coman and A. Barton Hepburn Professor of Economics; Courtney C. Coile , Class of 1966 Associate Professor of Economics; and Robin McKnight , Associate Professor of Economics, and published by the National Bureau of Economic Research (NBER), a non-profit, non-partisan research organization.

The paper is available online at http://papers.nber.org/papers/w18361?utm_campaign=ntw&utm_medium=email&utm_source=ntw

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