BlessWorld Foundation International

Affecting the World Through Health
A Global Health Initiative

Global Health and Economic Recession



Recession is defined as any significant continuing decline in activities across the economy of a country, industry or trade. Technically, recession is a normal part of the business cycle, despite being a major challenge. Many events precede a recession including one or more of the following: high interest rate, stock market crash, wage price controls, war, falling housing prices and sales, a slow down in manufacturing orders, deregulation, credit crunch, asset bubbles and deflation. The 2007-2009 global recession emphasized the precarious nature of investment strategies used by large financial institutions as well as the global nature of financial systems. The recession caused a significant setback for economies of virtually all the world’s developed and developing nations.

Within a country, a negative economic growth persisting in two consecutive quarters signifies the occurrence of an economic recession. A country’s economic growth is measured by it’s gross domestic product (GDP) which is the current market value of all goods and services produced within the country in a particular time period. Economic recession is therefore defined as a consecutive decline in a country’s gross domestic product (GDP) for two or more quarters. During an economic recession, everyone is impacted in various areas of life due to the many uncertainties that come with it. The most impacted group during this period remains the unemployed who are often impaired psychologically due to feelings of hopelessness.

The economy of a country shapes the cost of living and budget allocation including how much is assigned to healthcare and services. These factors can directly impact the health of the population by influencing the income value of the residents. Income, a socio-economic factor which is a social determinant of health, in turn influences the health and quality of life of these residents. Several studies across the globe have shown that recession influences health and health outcomes negatively.  Firstly, a study on the economic recession in Japan titled “Economic recession and health inequalities in Japan: analysis with a national sample, 1986–2001” found that self- reported health improved in absolute terms for all classes of residents after the economic recession. Another study in the United States recorded an increase in suicide rates in an estimated excess of 4,750 suicide deaths during the economic recession in 2012. Finally, a 2010 study in Spain showed that recession significantly increased the frequency of mental health disorders and alcohol abuse, particularly among families experiencing unemployment and difficulties in paying mortgage. It is notable that poor populations in all countries are usually the first and hardest to be impacted by any recession or downturn since recession is accompanied by increased cost of living.

In countries affected by an economic downturn the total health expenditure, public spending and private out-of-pocket expenses tends to decline. This reduction in total expenditure causes an increase in the cost of care, medicines and medical equipment. It also results in a negative impact on population health since reducing operating costs related to surveillance or supervision are likely to have immediate damaging effect on service delivery. Every recession would likely affect health directly or indirectly, depending on the cause, type, magnitude and how long it lasts. However, to limit the potential impact of economic recession on health, it is important to maintain the following:

  • Active labour market programmes that support the unemployed as well as keep and reintegrate workers in jobs
  • Increased family, parenting and social support programmes
  • Control of alcohol price and availability
  • Debt relief programmes
  • Increased strength of social capital
  • Accelerated mental health care reforms

Comments are closed.