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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.

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Presentation on theme: "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."— Presentation transcript:

1 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 Coutts and Martin McKee

2 Disaster ? Blessing ? Econocide to surge as recession bites – BBC Mar 2009 Recession is a lifestyle blessing in disguise – Times Oct 2008

3 Source: Hanley 1931 Life Great Depression: not so bad? Sources: NYT Oct 1930; AP 1932; WP 1930

4 - Income 30% - All-Cause Mortality Rates 10% - Suicide 40% Evidence

5 ProhibitionNew Deal

6 Post-Soviet Depression: devastating Rising Unemployment Alcohol and Surrogates Prisons and Tuberculosis

7 Overview - Income 30% - Suicide about 40% - All-Cause Mortality Rates 20%

8 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

9 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

10 Lessons? Social Protection Drugs and Alcohol Social Cohesion

11 Unemployment-Mortality 1% 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

12 Some populations more vulnerable

13 Social Protections Help… Each 100 USD greater social spending reduced the effect on suicides by: %, active labour market programmes %, family support %, healthcare %,unemployment benefits Spending> 190 USD no effect of unemployment on suicide Source: Stuckler et al 2009 Lancet

14 Recommendations Active Labour Market Programmes Health Stimulus Funding Evidence-Based Crisis Response Plan

15 An opportunity for whom?

16 Appendix

17 East Asian Financial Crisis: it depends Sources: Hopkins 2006 Health Policy; Chang 2009 Soc Sci Med

18 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)

19 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

20 Dow and Deficit

21 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

22 Stuckler, D., S. Basu, M. Suhrcke, A. Coutts, M. McKee The public health effect of economic crises and alternative policy responses in Europe: an empirical analysis. The Lancet. 374(9686): Stuckler, D., L. King, and M. McKee Mass privatization and the postcommunist mortality crisis: a cross- national analysis. The Lancet. 373(9661): Stuckler, D, S. Basu, M. Suhrcke, A. Coutts, M. McKee The health implications of financial crisis: A review of the evidence. Ulster Medical Journal. 78(3): Lock, K., D. Stuckler, K. Charlesworth, M. McKee Potential causes and health effects of rising global food prices. British Medical Journal. 339:b2403 Stuckler, D and S. Basu The International Monetary Fund's effects on global health: before and after the 2008 financial crisis. International Journal of Health Services. 39(4): Stuckler, D., S. Basu, and L. King 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 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 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): Stuckler, D., C. Meissner and L. King Can a bank crisis break your heart? Globalization and Health 4(1): Stuckler, D Population causes and consequences of leading chronic diseases: A comparative analysis of prevailing explanations. The Milbank Quarterly 86(2): Some Underlying Publications

23 I. Great Depression

24 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 5 th, 1932

25 Empirical Setup Sample and Period: 114 U.S. Cities, 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

26 Immediate Causes of Death

27 Effects of the Great Depression

28 Potential Role of Prohibition

29 II. Postcommunist Mortality Crisis

30 Three million excess deaths

31 Privatisation & Mortality

32 Unemployment: A mediating factor Adjustment for unemployment reduces privatisation coefficient by : -10% (mass privatisation program) - 25% (1 unit on EBRD scale)

33 Social Capital: A protective factor

34 Empirical Setup Sample and Period: 26 Postcommunist CEE and FSU Countries, 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 Two Way Fixed Effects + Control Function

35 Clue #1: Working-Ages

36 Clue #2: Men Russian Life Expectancy

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

38 Clue #4: Healthcare Collapse? 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

39 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 - ationsprivatization, stabilization, and liberalization must all be completed as soon as possible. Lawrence Summers (1994: ) Shock Therapy versus Gradualism

40 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

41 Russia & Belarus

42

43

44 Working-Age Men

45 Path Analysis: Alcohol and Unemployment

46 Job Loss & Health: Evidence from RLMS - Hazard Dying: ~3-4-fold - Odds Excess Vodka: 40%

47 Who loses jobs? - 40% higher risk at private firm Chance job loss next year: 10.4% if privatized 9.1% if Russian private 7.9% if foreign 6.2% if state

48

49 Failing Tuberculosis Control

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51

52

53 Inaccurate and Misleading Data

54 Russias regions: pace of economic change and LE

55 Table 3. Vodka consumption per capita YearBelarusRussia

56

57 Probability of surviving from 20 to 60

58 Health Resources

59 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

60 IV. Recessions in Europe

61 Men

62 Women

63 Other Measures

64 Interaction Term


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