Recessions Can Take up to Three Years Off Older Workers’ Lives, But Medicare and Social Security Can Help
New study shows recession’s toll on health of older workers; highlights the importance of social security and Medicare in the well-being of seniors
For Immediate Release: September 13, 2012
WELLESLEY, Mass.—A new study out of Wellesley College shows that over time, a recession can have significant, adverse effects on the health of older workers—and in some cases, can cut life expectancy by up to three years. Despite these unsettling new findings, the research revealed a silver lining: early entitlement to social security benefits and Medicare can serve to temper a recession’s negative effects on one’s health.
Coauthored by leading economists, the study was released mid-September 2012 by the National Bureau of Economic Research (NBER), a non-profit, non-partisan research organization. The researchers examined four decades of mortality data, studying survival probabilities along with the labor market conditions that existed in the years leading up to retirement.
Key findings of this study are:
- Experiencing a recession in one’s late 50's through early 60’s leads to reduced life expectancy, taking as much as three years off the lives of older workers who lose their jobs.
- As a result of a labor market downturn, as many as an additional one in ten older job losers—who would otherwise be expected to live longer—will not survive through age 79.
- Employment and income deficits associated with a recession last for years for these workers; health insurance coverage and access to health care also are affected for several years. These deficits can plausibly account for the reduced life expectancy.
- The longevity of 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 one of the study's coauthors, Wellesley economist Phillip B. Levine, the findings not only reveal unexpected consequences for older workers that lose their jobs, but also highlights the importance of safety nets like Social Security and Medicare. “Those workers who are unlucky enough to approach retirement during a recession will, unfortunately, face long-term health consequences. 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 Economic, and published by the National Bureau of Economic Research (NBER).
An abstract and full text of the study are available online at:
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About Wellesley College
Since 1875, Wellesley College has been a leader in providing an excellent liberal arts education for women who will make a difference in the world. Its 500-acre campus near Boston is home to 2,400 undergraduate students from all 50 states and 75 countries