The role of economic shocks on health: evidence from German Reunification

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Abstract

Sudden economic shocks impact the everyday lives of people from one day to the next. A number of studies have examined the association between economic fluctuations and health; however, no consensus on the nature of this relationship has been established. By exploiting the dramatic economic fluctuations following the German Reunification of 1990, which included a sudden change from a socialist to a capitalist system in East Germany, this study examines the association between broad negative economic shocks and health. The article finds that increases in state unemployment rates are associated with large and statistically significant declines in health outcomes. Estimates are stronger for people who became unemployed shortly after reunification, for low‐income individuals, and for East Germans, a group confronted with larger economic fluctuations.
Original languageEnglish
Pages (from-to)275-296
Number of pages22
JournalSouthern Economic Journal
Volume84
Issue number1
Early online date28 Apr 2017
DOIs
Publication statusPublished - 31 Jul 2017

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Keywords

  • economic shock
  • health
  • German Reunification

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