Conferences at Department of Economics, University of Toronto, RCEF 2012: Cities, Open Economies, and Public Policy

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The Time-Varying Relationship Between Mortality and Business Cycles in the U.S.

Jean-Paul Lam, Emmanuelle PiƩrard

Last modified: 2012-06-22

Abstract


Our paper explores the relationship between mortality among working-age and non-working adults and the business cycles in the United States. We first present a theoretical model to outline the transmission mechanisms from the business cycles to health status. We use our theoretical model to motivate our empirical framework. We find overwhelming evidence of structural breaks in the relationship between mortality and the business cycles. We use a model that features time-varying parameters and variance to capture the salient fact that macro-economic variables and their volatility have changed over time. We find that there is a strong link between mortality and the business cycles. Mortality is pro-cyclical for most age groups and the causes of death we examine in the paper. Moreover this relationship is highly time-varying. We also find that the relationship between total mortality and the business cycles has strengthened over time, especially in the late 1980s and subsequent periods. This may be partly explained by the structural change the U.S. economy experienced in the 1990s and the rise in the number of hours worked.

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