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Thursday, August 31, 2017

Is Poor Health Hindering Economic Growth?

Ellyn Terry at the Atlanta Fed's macroblog:

Is Poor Health Hindering Economic Growth?: It is well known that poor health is bad for an individual's income, partially because it can lower the propensity to participate in the labor market. In fact, 5.4 percent of prime-age individuals (those 25–54 years old) reported being too sick or disabled to work in the second quarter of 2017. This is the most commonly cited reason prime-age men do not want a job, and for prime-age women, it is the second most often cited reason behind family responsibilities (see the chart). (Throughout this article, I use the measure "not wanting a job because of poor health or disability" as a proxy for serious health problems.)

In addition to being prevalent, the share of the prime-age population citing poor health or disability as the main reason for not wanting a job has increased significantly during the past two decades and tends to be higher among those with less education (see the chart).

Yet by some standards, the health of Americans is improving. For example, compared to two decades ago the average American is living two years longer, and the likelihood of dying from cancer or cardiovascular disease has fallen. These specific outcomes, however, may have more to do with improvements in the treatment of chronic disease (and the resulting reduction in mortality rates) than improvements in the incidence of health problems.
Another puzzle—which is perhaps also a clue—is the considerable variation across states in the rates of being too sick or disabled to work. For example, people living in Mississippi, Alabama, Kentucky, or West Virginia in 2016 were more than three times likelier to indicate being too sick or disabled to work than residents of Utah, North Dakota, Iowa, or Minnesota (see the maps below).
This cross-state variation is useful because it allows state-by-state comparisons of the prevalence of specific health problems. Among a list of more than 30 health indicators, the two factors that most correlate with the share of a state's population too sick or disabled to work were high blood pressure (a correlation of 0.86) and diabetes (a correlation of 0.83). Both of these conditions are associated with risk factors such as family history, race, inactivity, poor diet, and obesity. Both of these health issues have increased significantly on a national basis in recent years.

So how might poor health hinder economic growth? Health factors accounts for a significant part of the decline in labor force participation since at least the late 1990s. After controlling for demographic changes, the share of people too sick or disabled to work is about 1.6 percentage points higher today than it was two decades ago (see the interactive charts on our website). Other things equal, if this trend reversed itself during the next year, it could increase the workforce by up to 4 million people, and add around 2.6 percentage points to gross domestic product (calculated using our Labor Market Sliders).
Of course, such a sudden and large reversal in health is highly unlikely. Nonetheless, significant improvements to the health of the working-age population would help lessen the drag on growth of the labor supply coming from an aging population. Public policy efforts centered on both prevention and treatment of work-impeding health conditions could play an important role in bolstering the nation's workforce.

    Posted by on Thursday, August 31, 2017 at 07:21 AM in Economics, Health Care | Permalink  Comments (12)


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    $mart $$$$ £ong said...

    Overpopulation-al atmospheric carbonation
    Carbonic global warming
    Productivity loss from global warming

    Go figure
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    anne said in reply to DrDick...

    I appreciate these references.

    kaleberg said...

    One would expect people with less education to be disabled more often. The jobs they can get are more likely to be body jobs, not brain jobs. Stephen Hawking can do physics in a wheelchair. Try cleaning hotel rooms or hauling two by fours without working arms and legs.

    One would expect states with a higher proportion of brain jobs to have lower disability rates. For every PhD analyzing genetic data there are two or three lab workers feeding the sequencers. There is a definite negative correlation between the percentage of the population with a bachelor's degree and the disability rate per capita. (If you ignore DC.)

    reason said...

    Answer,
    probably not much (i.e. people claiming disability allowance were probably not going to be very productive anyway). And as we have seen, lots of people seem to get better when more jobs become available (or rather have a choice of jobs where their disability is not such an issue). When more people are complaining of overwork than are complaining they can't find good jobs, then I'll take notice.

    Jacky said...

    Health is major cause of worry for this generation and that’s all down to lack of discipline with things and also quality of it. We must keep it as our priority to get health right. It’s why I focus on it heavily and being a trader, it’s not exactly stressful to work. I get great help with broker like OctaFX, as they are highly supportive and got low spreads, fast execution and even huge deposit bonus that are up to 50%.

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    This is a vicious fraud, a repeated vicious fraud.

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    2005Robots 2015 AI said...

    I would think the chain-of-command would be aided by a semi-public MRI database. Eventually, MRI's will be cheap, but for now a science of mental lapses and mental illness as well as teaching utilitarianism and expert knowledge; is all amenable to MRI data forming evidence-based growth.

    jamzo said...

    . (Throughout this article, I use the measure "not wanting a job because of poor health or disability" as a proxy for serious health problems.)

    . (Throughout this article, I use the measure "not wanting a job because of poor health or disability" as a proxy for serious health problems.) ...??? "not wanting to work" is a proxy for serious health problems? ..

    to quote a former president "come on man!"

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    DataDrivenFP said...

    The map looks very much like maps of primary care shortage, poverty, unemployment, and opioid deaths.
    It looks like there's a common factor here.

    Part of the reason for the disparity in states may be due to economic conditions. Poorer people have to eat cheaper food which is often high in sugar, carbs, and bad fats. All that leads to health problems.

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