The Economic Crisis is Dangerous to Our Health

Annamaria Lusardi, Dartmouth College and NBER
Daniel Schneider, Princeton University
Peter Tufano, Harvard Business School and NBER

We use a new unique nationally representative cross-national data set to report an unexpected consequence of the financial crisis: a reduction in individuals’ utilization of health care. We show that large shares of the populations of the US, UK, Canada, France, and Germany have reduced their use of routine medical care since the onset of the crisis. This reduction is especially large in the US where 27% of Americans have reduced their use of routine care. We show that reductions in care are strongly associated with the exogenous shocks of wealth loss and unemployment. However, variation in the severity of the economic impact of the crisis by country does not explain the gap in care reduction between the US and other countries. Our analysis provides new evidence for the causal connection between economic status and health care utilization, especially in a regime where individuals are more financially responsible for care.