At present, the focus of the health services is on saving the lives of those infected with COVID-19. The social isolation measures put in place to reduce the spread of the coronavirus have already had, and are likely to continue to have, a major impact on the economy, leading to loss of employment and income for many (Baldwin and Weder di Mauro 2020, Bell et al. 2020). In normal times, a large and growing proportion of the health service budget of the UK – and that of many other countries – is spent treating chronic health conditions, such as cardiovascular disease, respiratory conditions, diabetes and mental illness. In England the treatment and care of people with chronic diseases accounts for an estimated 70% of total health and social care expenditure (Department of Health 2010). Around one in three of the population currently have at least one long-term health condition. How will the economic downturn that is following the efforts to deal with the pandemic affect chronic illness?
In a recent paper (Janke et al. 2020), we examine the effect of changes in the employment rate on chronic illness on 25 to 64 year-olds in the UK during the last 15 years. Our statistical model allows for effects from changes in the national employment rate as well as from changes in people’s local employment rate. It also allows for feedback across areas and feedback effects from population health to employment rates and back to population health. We use data from the largest household survey in the UK, the Quarterly Labour Force Survey, covering around 80,000 people per quarter.
Our analysis shows that a recession will lead to a large rise in the prevalence of chronic ill health. During the most intense part of the financial crisis of the late 2000s in the UK, there was around a 5% fall in the employment rate, a drop that was low by international standards. Assuming a (possibly conservative) fall in the employment rate in the coming year of the same size, our analysis predicts that the prevalence of chronic conditions in the working-age population will rise by somewhere between 7% and 10%. This increase translates into around 900,000 more people of working age who will suffer from at least one chronic condition.
In the short run – within the year – the increase will only be around half that size. But our research shows that there are important feedback effects from aggregate national levels of chronic illness to the impact at local level. These feedback effects will amplify the response to economic conditions, so that it will take around two and a half years for the full impact of an employment drop today to manifest itself. The rise in chronic illness will be moderated to the extent that the downturn is quickly reversed, but this delay in response means that the projected rise in chronic illness is likely to occur even if the economy picks up quickly. And, of course, if employment continues to fall next year or there is no bounce back at all, there will be further increases or a permanent rise in chronic illness.
The impact will be particularly large for certain types of chronic illness. In our research we examined musculoskeletal conditions (which include the very common problems of arthritis or chronic back pain), cardiovascular diseases (which include heart problems), respiratory diseases (which include asthma) and mental health conditions. Each of these conditions affects between 5% and 10% of the working-age population and many people suffer from more than one condition. Our estimates suggest that while we will see growth of all these conditions following a downturn in the economy, the increase in mental health conditions will be largest and perhaps twice the size of the increase in some of the other conditions. This prediction is particularly worrying as levels of mental ill health rose after the financial crisis of 2008 and have not dropped in the ten years since that crisis, even though the economy had picked up. Our estimates suggest that for an economic downturn similar to that of the financial crisis of 2008, there may be around half a million more people of working age who experience mental health problems.
Finally, we found considerable differences between local areas in the impact of an economic shock. Specifically, we found stronger responses to changes in employment in areas that are already less resilient to economic shocks such as Eastern Scotland, the Tees Valley, Derbyshire, East Wales, Cumbria and East Yorkshire. These are areas with a higher proportion of employment in ‘blue collar’ industries, areas which have older populations and areas with populations who are already in poorer long-term health. Our research implies that while the population of almost all parts of the UK will experience increases in chronic conditions, the negative effect in these areas will be considerably larger.
These findings suggest that government response to the virus will need not just to protect income and employment in the short run, as the current measures in the UK are intended to do, but will also have to address ways of stemming the increasing cost to the NHS and individuals of rising levels of chronic ill-health. They also highlight that the current arguments about the trade-offs between isolation and return-to-work are more nuanced than simple ‘lives’ versus ‘money’ and are more to do with ‘lives’ versus ‘healthy lives’.
References
Baldwin, R and Weder di Mauro, B (eds) (2020) Mitigating the COVID Economic Crisis: Act Fast ad Do what it takes. a VoxEU.org eBook, CEPR Press.
Bell, B, N Bloom, J Blundell and L Pistaferri (2020), “Prepare for wage cuts if you are younger and work in a small firm”, VoxEU.org, 6 April.
Department of Health (2010), “Improving the health and wellbeing of people with long term conditions”, Leeds, UK.
Janke, K, K Lee, C Propper, K Shields and M Shields (2020), “Macroeconomic conditions and health in Britain: Aggregation, Dynamics and local area heterogeneity”, CEPR Discussion Paper 14507 (also IZA Discussion Paper No. 13091).
