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Speaker: Amy Finkelstein, MIT

Amy Finkelstein is the John & Jennie S. MacDonald Professor of Economics at the Massachusetts Institute of Technology.

Title: Lives vs. Livelihoods: The Impact of the Great Recession on Mortality and Welfare

Abstract: We leverage spatial variation in the severity of the Great Recession across the United States to examine its impact on mortality and explore implications for the welfare consequences of recessions. We estimate that an increase in the unemployment rate of the magnitude of the Great Recession reduces the average, annual age-adjusted mortality rate by 2.3 percent, with effects persisting for at least 10 years. The effects appear across causes of death, but are concentrated in the half of the population with a high school degree or less. We estimate similar percentage reductions in mortality at all ages, with declines in elderly mortality thus responsible for about three-quarters of the total mortality reduction. Recession-induced reductions in air pollumailto:ig3989@princeton.edution are a quantitatively important mechanism behind the recession-induced mortality decline. Incorporating our estimates into a standard macro framework substantially reduces the welfare costs of recessions, particularly at older ages where they may even be welfare-improving.