Recessions and health

Recessions can be good for your health.  Recessions can be bad for your health.  Apparently it depends on who you are.

Recessions seem to decrease the death rate among younger folks.  This has been attributed mainly to a decrease in automobile fatalities (see Christopher Ruhm’s work).  The thought is that during a recession there are fewer cars on the road, so folks are less likely to get into an automobile accident.

Oddly, recessions also seem to decrease the death rate among older folks.  Recent work on this finding (by Doug Miller and company) suggests that in a recession the quality of people working home health care jobs decreases the mortality of older peeps.

However, recessions aren’t all good.  A new paper by Courtney Coile, Phil Levine, and Robin McKnight finds a delayed penalty to hitting a recession (and losing your job) in your late 50s.  That’s the age when it’s hard to get a new job (because of things like age discrimination), but you were planning on several more years of highly paid (compared to your earlier years) work before hitting retirement, or at least before hitting the early social security claiming age of 62.  It is a difficult time to have to start spending down instead of bulking up.

Worse than that is the loss of health insurance in the years before Medicare eligibility.  The authors suggest that this lack of health insurance is driving the negative results that they find.

How negative?  They find that a worker who loses hir job at 58 in a recession lives 3 fewer years than a comparable worker who does not lose hir job.

What can you do, besides marrying someone who can cover you with hir health insurance?  Well… probably not much.  You can save a lot while you’re young.  You can create side incomes.  You can build professional networks.  And you can support pushes for affordable universal health care coverage in your state.

Are you protecting yourself from job-loss in your 50s or beyond?  If so, how?


23 Responses to “Recessions and health”

  1. investfourmore Says:

    I’m investing in Real Estate. I plan to purchase 100 properties by 2023 and I won’t fever need to work again if I don’t want too. Planning for retirement by calculating how long you are going to live and how frugally you can live is not for me. With passive income from real estate I never eat away at the principle, the monthly cash flow provides more income than I will ever need if my plan goes well.

    • nicoleandmaggie Says:

      That’s a lot of properties. Isn’t managing them or managing the managers itself work?

      • investfourmore Says:

        Yes, that is a lot of Management to do myself. I plan on starting my own property management company this summer and worst case scenario I will hire property manager after I reach ten. I have 7 right now.
        A good property manager will take care of everything for you, that is their job. With 100 rental properties my cash flow would be almost 1 million a year do I could easily spend 10% of rents on a property manager. Those income projections do not account for any appreciation or rent increases in ten years.

  2. Comradde Physioprof Says:

  3. plantingourpennies Says:

    We’re opting for saving a lot while we’re young as well as trying to live healthy lifestyles to avoid (as muh as possible) the trifecta of hypertension, diabetes and heart disease that significantly increases cost of care as we age.

  4. Cloud Says:

    Hmmm. Another thing in favor of switching out of my volatile industry at some point…. I guess you could say I’m building side incomes with my writing. I may add in other income sources and/or decide to write more at some point. We’re also saving and trying to make sure our finances are solid. But yeah, losing my job when I’m 50 (a mere 10 years from now!) would suck.

  5. bogart Says:

    I’m comparatively well situated, for an American: my DH (who is retired and has employer coverage despite not being 65) can add me + DH to his group plan at any time, in theory. This isn’t wildly cheap — maybe $600/month for the two (extra) of us for their “better” plan (which is good but not great — we live in the South, so employee expectations, and results, are relatively low. None of those crazy unions around here, nosir!). An annoyance is that if he gets run over by a bus and we’re not covered at that point, we are no longer eligible (but if we had coverage we would be).

    As for me, if I stay with my current employer for a little more than a decade beyond right now (but who’s counting?) I will qualify for full retirement benefits from same, which will include (eligibility for) group health insurance at approximately the same price I pay now ($~250 premium covers me + DS, plan is good but not great — but the best available). Of course, that projection assumes the rules don’t change (about retirement, eligibility, etc.).

    • nicoleandmaggie Says:

      Keep him out of the path of buses!

      • bogart Says:

        Technically it’s his job to keep me out of the path of buses (because of our respective natural propensities). But, yes. Good plan, for any number of reasons, health insurance not being at the top of the list.

  6. Mutant Supermodel Says:

    I don’t know if this is just because I’m young and optimistic, but I just have this feeling that I can always get some kind of work. I like so many different things and do so many different things and am SO flexible, I don’t really stress potential job losses anymore. I think the scare I went through here a year ago cured me of it. I guess that’s one perk to not being a specialist and being all over the place eh?

  7. GMP Says:

    Reading things like this makes me really, really grateful I have tenure.
    Btw, I don’t really plan on retiring. I look forward to being an old fart, boring my students with tales of yore.

    • nicoleandmaggie Says:

      Definitely! Though my mom always said she’d die in the classroom and now she’s talking about retiring in 5 years and moving to California. So who knows…

      • Rosa Says:

        My mom took an early retirement buyout, and was so worried she’d be bored, she signed up to teach community college the first year (and she loved that, after decades of teaching elementary school. She called me one day and said “You know what’s great? If they won’t do the work it’s THEIR OWN FAULT”).

        But she found after that year transition the thought of having “nothing to do” was much less scary. She & her husband quite enjoy their new permanent vacation status. It might be different if they were pinching pennies but since they brought us up like paupers, they’re comparatively living like kings right now.

      • nicoleandmaggie Says:

        Yeah, my parents are in that situation as well– my dad doesn’t know how to spend money so he’s been having fun giving it away to worthy causes.

  8. chacha1 Says:

    In ten years I’ll be 57, so I do think about this stuff. The field I am in (intellectual property law) is relatively recession-proof and once a person has a good work history, it’s not that hard to find a new job if one fails (I’ve been laid off twice and had one department closed underneath me, but have never been out of work more than 4 months).

    My “exit strategy” and “gap income” plans are the same. A few years back I certified as a personal trainer and ballroom dance instructor. Updating my certifications would take just a few months of evening study, and less than $1000.

    Since the husband is already self-employed, we are both high earners, we are self-insured, and we have a decent retirement fund, we don’t stress too much about my job stability. We also don’t own a home, so if our income went down drastically all we would have to do is find a cheaper rental in order to lower our cost of living.

  9. Debbie M Says:

    Protecting myself from job loss in my 50s? Uh, not so much.

    I did have a nice cushy job with the state government, so that meant good benefits, no layoffs, and easy desk work (possible with low energy and other health problems).

    But this last recession led to layoffs. I escaped the layoffs, but not the more-with-less atmosphere. And then, add a new head who wants to pad his resume with big projects but also wants to base hiring and reorgs on something other than ability or interest, and you have a half-empty high-turnover office where the new people are either unsuited to their jobs or quickly leave. I became a harried person who caught myself making strangulation gestures to my new boss as she walked away. Not good.

    So I quit my job at age 49, 3 years from getting a pension, with no other job in view–that’s the opposite of protecting myself from job loss in my 50s!

    Fortunately I couldn’t resist the Roth IRA when that was invented, and I managed to max out contributions to that every year. And I started reading Early Retirement Extreme, so I learned how to get health insurance on my own. (I also had just started contributing to my 457, an excellent unemployment account, but not in time for it to amount to much. Same with the extra investments in growth dividend stocks–I can now cover $19.45/month of my expenses with dividends.)

    I’ve survived the last 1.25 years on multiple half-time jobs one step away from my old office (working for my old colleagues in the different deans’ offices who I think of as my chickadees), but these days my old office still manages to get me to blow my top at least once a day. By next month, I’ll be able to survive on my IRA contributions until my pension (now in 4 years). But I’m going to keep taking these half-time jobs if they’re offered to me because my chickadees need me. Every time I blow my top making another bug report (and re-explaining it multiple times and explaining why their so-called solutions won’t actually work, etc.), that’s another bug report someone else doesn’t have to make, and my chickadees have even less time–and MUCH less interest in most cases–than I do.

    Not married. No side-incomes. Living in a state deathly allergic to universal health care.

    I do have pretty low living expenses (although they are quite a bit higher than $19.45/month). Interestingly, quitting actually helped my health (I tested for hypothyroidism in my last pre-quitting physical but resisted medication until a post-quitting test; those have all been normal).

  10. Leigh Says:

    I see every day how little of the workforce at my company is past age 35-40. That’s why when I first drew up my IPS, I set my retirement age at 50. I do not want to *have to* in any circumstances find a job past age 50. I don’t know if I will still work, but I at least want the option not to need to find a new job. (I hope all those negatives aren’t too confusing!)

    So I guess my plan is to just build up a great nest egg early in life, sort of like the POPs. Saving lots of money while young also means more years of compounding. So far, it seems to be going okay, hopefully it keeps working…

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