The physiological impacts of wealth shocks in late life: Evidence from the Great Recession
Introduction
The Great Recession of 2007–2009 was the worst economic downturn in the United States since the Great Depression. During the two years at the height of Recession, the net worth of American households declined drastically, with the average household losing approximately $50,000 in wealth (Pfeffer et al., 2013). Further, the economic recovery from the Recession has been among the slowest in history. As of 2011, the net worth of the typical American household was approximately 50 percent of its 2003 value (Pfeffer et al., 2013). Given documented links between individual socioeconomic status (SES) and health, it is likely that—in addition to its impacts on individuals' wallets and bank accounts—the Great Recession also took a toll on individuals' disease and mortality risk.
While the Great Recession had a profound effect on earnings and employment rates, its effect on household wealth levels is of particular concern to population heath researchers. Considered a holistic measure of financial well-being by many social scientists and public health researchers interested in socioeconomic inequality (Keister and Moller, 2000, Oliver and Shapiro, 1995, Pollack et al., 2007, Robert and House, 1996, Spilerman, 2000), wealth reflects ownership of assets such as equity in homes, retirement accounts, stocks, and bonds, and it also accounts for debts and liabilities. Several studies have found that, net of other measures of SES, wealth has a significant relationship with health (Hajat et al., 2010, Hajat et al., 2011, Robert and House, 1996). Further, research suggests that the relationship between wealth and health may be strongest at older ages, as individuals exit the labor market and turn increasingly to their accumulated assets to support themselves and their families (Robert and House, 1996). Accordingly, the Great Recession's effect on the retirement accounts, investments, and housing values of older adults likely had a tremendous impact on their physiological health and well-being.
To date, research on the health effects of the Great Recession has produced inconsistent results (Stuckler et al., 2015), and critical gaps in the literature linking macro-level economic conditions and health remain. Utilizing nationally representative, longitudinal data from the National Social Life, Health, and Aging Project (NSHAP) and individual fixed effects models, this study examines how household-level wealth shocks experienced during the Great Recession relate to changes in biophysiological functioning in older adults. The period of the NSHAP data collection encompassed the Recession, with Wave 1 collected in the two years immediately preceding the Recession (2005–06) and Wave 2 collected in the two years following the height of the Recession (2010–11). This unique design provides a quasi-natural experiment that allows for the direct observation of individual changes in both socioeconomic well-being and health during the Recession period. By linking changes in household wealth status to changes in inflammatory response and cardiovascular function from the pre-to post-Recession period while controlling for stable individual characteristics, this study provides convincing evidence of a causal association between wealth shocks and physiological well-being. Further, this study assesses the possible psychosocial and behavioral mechanisms relating household wealth shocks to individual health changes. Linking macro-level conditions, meso-level household environments, and micro-level biological processes, this study provides new insights into the mechanisms through which economic inequality contributes to disease and mortality risk in late life.
Section snippets
Older adults and the Great Recession
The Great Recession resulted in unprecedented financial losses for many American households. Between 2007 and 2009, average housing prices in the largest metropolitan areas in the US dropped by nearly one-third. Stock prices also collapsed, with the Dow Jones Index losing approximately half of its value during the period (Pfeffer et al., 2013). Unemployment soared, jumping from 5.0 percent in December 2007 to 10.0 percent in October 2009 (U.S. Bureau of Labor Statistics, (2012)). In terms of
Data
Data for the present study are from the National Social Life, Health and Aging Project (NSHAP), a nationally-representative longitudinal study of community-dwelling older adults aged 57–85 years in 2005–2006 (Wave 1) and followed up in 2010–2011 (Wave 2) in the U.S. Of the original Wave 1 respondents, 75 percent were re-interviewed at Wave 2. African-Americans, Latinos, men and the oldest-old (75–84 years at the time of screening) were over-sampled. The NSHAP collected extensive information on
Results
Table 1 presents the descriptive statistics for all variables included in the analyses. The mean wealth loss in the analytic sample was approximately $5100. While this average loss is substantially lower than the losses described by Ackerman et al. (2012), as described earlier, those excluded from our analytic sample were more likely than those included in the analytic sample to be black, older age, less educated, and female—all characteristics that are negatively associated with wealth. Fig. 1
Discussion and conclusion
Despite a surge in studies on the health effects of the Great Recession in recent years, the literature in this area is largely inconsistent, and critical gaps in our understanding of the linkages between macro-economic downturns and health and disease risk remain. As noted, most studies on the health effects of the Great Recession rely on aggregate population data, which can underestimate the effects of economic shocks on intra-individual health change. Of the studies that do examine
References (80)
- et al.
Stress, inflammation and cardiovascular disease
J. Psychosom. Res.
(2002) - et al.
How does the business cycle affect eating habits?
Soc. Sci. Med.
(2012) - et al.
Educational differentials in mortality: United States, 1979–1985
Soc. Sci. Med.
(1996) - et al.
Do the wealthy have a health advantage? cardiovascular disease risk factors and wealth
Soc. Sci. Med.
(2010) - et al.
Associations of elevated Interleukin-6 and C-reactive protein levels with mortality in the elderly
Am. J. Med.
(1999) Mental health in the foreclosure crisis
Soc. Sci. Med.
(2014)- et al.
Panel data and models of change: a comparison of first difference and conventional two-wave models
Soc. Sci. Res.
(1985) - et al.
The social context of health selection: a longitudinal study of health and employment
Soc. Sci. Med.
(2001) Recessions lower (some) mortality rates:: evidence from Germany
Soc. Sci. Med.
(2004)- et al.
Socioeconomic status, C-reactive protein, immune factors, and responses to acute mental stress
Brain Behav. Immun.
(2003)