What is the evidence of the impact of the economic crisis on public health? David Stuckler, PhD MPH Oxford and LSHTM With Marc Suhrcke, Sanjay Basu, Adam.

What is the evidence of the impact of the economic crisis on public

health?

David Stuckler, PhD MPH

Oxford and LSHTM

WithMarc 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

Source: Hanley 1931 Life

Great Depression: not so bad?

Sources: NYT Oct 1930; AP 1932; WP 1930

- Income ↓ 30%

- All-Cause Mortality Rates ↓ 10%

- Suicide ↑40%

Evidence

ProhibitionNew Deal

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

Lessons?

Social Protection

Drugs and Alcohol

Social Cohesion

Unemployment-Mortality1% 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

1015

2025

Un

emp

loym

ent R

ate

(Lab

our F

orce S

urveys)

89

1011

12S

uici

de

Ra

tes

per

10

0,00

0 (u

nde

r 6

4)

1980 1985 1990 1995 2000 2005Year

Suicide Male Unemployment Rate

Average Labour Market Protection: $88 per headSpain

24

68

10

Un

emp

loym

ent R

ate

(Lab

our F

orce S

urveys)

1520

2530

Sui

cid

e R

ate

s p

er 1

00,

000

(un

der

64)

1980 1985 1990 1995 2000 2005Year

Suicide Male Unemployment Rate

Average Labour Market Protection: $362 per headSweden

24

68

1012

Un

emp

loym

ent R

ate

(Official)

6.5

77.

58

8.5

Sui

cid

e R

ate

s p

er 1

00,

000

(un

der

64)

1970 1980 1990 2000 2010Year

Suicide Unemployment Rate

Average Labour Market Protection: $95 per headUnited 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> 190 USD no effect of unemployment on suicide

Source: Stuckler et al 2009 Lancet

Recommendations

• Active Labour Market Programmes

• Health Stimulus Funding

• Evidence-Based Crisis Response Plan

An opportunity for whom?

Appendix

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 of the 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

Effects of the Great Depression

Potential Role of Prohibition

II. Postcommunist Mortality Crisis

Three million excess deaths

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

Two Way Fixed Effects + Control Function

Clue #1: Working-Ages

Clue #2: Men

Russian Life Expectancy

Clue #3: Immediate Causes: Heart Attacks, Accidents, Suicides

Clue #4: Healthcare Collapse?

0

100

200

300

400

500

600

700

1965 1975 1985 1995

Yeard

ea

ths/

10

0,0

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

ect

an

cy 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

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

Failing Tuberculosis Control

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

Men

Women

Other Measures

Interaction Term