The Mystery of the Higher Death Rates

Here's something unexpected: Mortality rates rise when the economy is good and fall when the economy is bad. What accounts for this counterintuitive correlation?

A National Bureau of Economic Research study took a look and found that most of the additional deaths during good times are among elderly women, particularly those in nursing homes. Another piece of the puzzle: staffing in nursing facilities moves counter-cyclically. In other words, during boom times nursing homes have a harder time competing with other businesses for the best workers. Consequently, when times are good they tend to be staffed by less competent workers.

"These findings suggest that cyclical fluctuations in the mortality rate may be largely driven by fluctuations in the quality of health care," the researchers conclude.

Source: National Bureau of Economic Research, The Best of Times, the Worst of Times: Understanding Pro=cyclical Mortality, Working Paper No. 17657