The temporary and permanent effects of unemployment on mortality in Europe

Abstract

Recent research on the relationship between unemployment and mortality is inconsistent. The statistical methodology used in this study decomposes the effect of unemployment on mortality into temporary and permanent effects and estimates the unemployment-mortality relationship, using aggregate data from 11 European countries for the period 1971-2001. Decomposing the effect of unemployment in this way shows that while the temporary effect of an increase in unemployment is to lower mortality, the permanent effect is to increase it. Importantly, the permanent effect is generally much stronger than the temporary effect. These results hold true for nearly all mortality indicators studied.