The Effects of the Great Recession on Health in Germany

Sergej Bechtoldt (University of Duisburg-Essen/RGS Econ)

Our study evaluates the effects of the 2008/09 Great Recession on health and health care utilization in the German population. Unlike most other European economies, Germany is generally thought of as being only mildly affected by the Great Recession. Thus, the health impacts of this global economic event are frequently studied, but only a few of these studies focus on Germany. Nevertheless, there was considerable heterogeneity in the impact of the shock at the regional level, thus making Germany a suitable case for studying the Great Recession’s effects.

Using a large individual-level health insurance claims dataset as well as the German Socio-Economic Panel (SOEP) for the period 2005-2011, we contribute to the literature by separately identifying effects of the real economy (like unemployment) and financial sector shocks on several physical and mental health indicators and taking possible heterogeneity between different subpopulations into account.

We apply difference-in-differences as well as synthetic control strategies exploiting regional differences in the real economic effects of the crisis and heterogeneity in the probability of being affected by stock market downturns. Our preliminary results suggest that civil servants’ health mainly reacts to financial shocks whereas employees rather tend to be affected by the real economy.