Job Loss in Older Population Can Shorten Lives, but Medicare and Social Security Safety Net Can Help
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.
The study, coauthored by Wellesley 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, was released mid-September 2012 by the National Bureau of Economic Research (NBER). It was also the subject of a recent story in U.S. News & World Report, “Medicare, Social Security Literally Extend Lives.”
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. They found that experiencing a recession in one’s late 50's through early 60’s leads to reduced life expectancy and can take as much as three years off the lives of older workers who lose their jobs.
Employment and income deficits associated with a recession last for years for older 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.
As a result of a labor market downturn as many as an additional one in ten older workers who lose their jobs will not survive past age 79, even though they would otherwise be expected to live longer.
Conversely, the study showed that life expectancy of workers who have already reached 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 Levine, the findings not only reveal unexpected consequences for older workers who lose their jobs, but also highlight 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 published by the National Bureau of Economic Research (NBER). Members of the media are invited to read the full press release or email email@example.com for more information.