Starting work in a recession affects people for their whole lives

TIMING IS EVERYTHING. This is especially true in the labour market. Workers who start looking for a job during a recession earn significantly less than their timelier counterparts. This wage penalty can last for years—a phenomenon economists call wage “scarring”. Until now, it has been assumed that such scars are mainly economic, affecting workers’ employment, income and wealth. But new research by Hannes Schwandt of Northwestern University and Till von Wachter of the University of California, Los Angeles suggests that economic downturns can have other long-lasting effects.

Using data on the roughly 4m Americans who entered the workforce shortly before, during and after the 1982 recession—when unemployment reached almost 11%—the authors measured how the downturn affected those people’s health and mortality many years later. On joining the labour force, they faced a national unemployment rate 3.9 percentage points higher than that before the onset of recession. That was associated, the authors found, with a cut in their life expectancy of six to nine months. The additional deaths were from causes linked to unhealthy behaviour, including heart disease, lung cancer, liver disease and drug poisoning.