Do Recessions Rein in Your Teen?

In a series of papers related to adult mortality and behavior over the business cycle, Ruhm found that, in general, recessions were associated with better health.   Specifically, he found that mortality declined and health behavior improved when the economy, as measured by state-specific unemployment rates, temporarily declined. This research explores whether improved health behavior during economic downturns carries over to the younger crowd, specifically to high-school-aged teens.  The analyses are conducted using state-level mortality data from the CDC as well as data from the Youth Risk Behavior Surveillance System (YRBSS), which is the youth version of the behavioral data used in the research performed by Ruhm.

Studies that examine this relationship within the US often posit that the primary links between macroeconomic activity in general and unemployment in particular and health are the resulting changes in income and the opportunity cost of time. Models of decision-making regarding health behaviors by adolescents differ somewhat from those used to explain adult behavior.  This difference is particularly salient when considering changes in the opportunity cost of time associated with economic downturns.  The decline in the opportunity cost of time may impact healthy behaviors (exercise) and risky behavior of teens through two possible mechanisms.  First, during a downturn, teens have more time at hand to exercise. However, this additional time also allows for increases in behaviors that might include sexual activity and substance use. An economic downturn also alters the cost and availability of parental time.  An increase in economy-wide joblessness leads to a decline in the opportunity cost of time among parents (or adults) as well. This is likely to translate into increased parental monitoring and supervision of children.

This analysis focuses on the teen unemployment rate to observe the impact of teen- specific labor market downturns on both risky (sexual activity along with the consumption of alcohol, cigarettes and marijuana) and healthy behaviors (exercise and healthy diet) as well as a separate analysis of the impact of the overall state level unemployment rate:

  B_ist^*=  α + β₀^' X_it  +  β₁ UNEMP_st  + β₂ CIGPRICE_st  + β₃ BEERTAX_st  + T_t + S_s + ε_ist (2)

where B*_ist represents the underlying probability that individual i engages in each of the health-related behaviors discussed above in state s at time t.  X is a vector of personal characteristics that include age, race and ethnicity. The substance use models include the average state price of a pack of cigarettes as well as the state-level beer tax to proxy for the price of alcohol.  Preliminary results suggest that there is some positive impact of economic downturns on the behavior of teens.  Important positive effects are that recessions tend to reduce sexual activity and increase the level of physical activity among teens. Overall, the decrease in the level of sexual activity is consistently significant across all age groups and gender.  Further analysis with teen specific mortality data will be included as a robustness check.