Medicare, Social Security Literally Extend Lives

People near retirement who lose their jobs live shorter lives than older jobless victims, researchers find.

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During the silly season leading up to the November elections, you can expect to hear every claim imaginable about our beleaguered senior benefit programs, Medicare and Social Security. Yet according to a recent study, one of the most dramatic possible claims about these programs turns out to be true: They are adding years to the lives of seniors.

This finding was not the primary purpose of the study, conducted by Wellesley College researchers Courtney C. Coile, Phillip B. Levine, and Robin McKnight. Its goal was to look at the impact of the recession on people's health and, ultimately, their longevity. Earlier research has repeatedly reached the surprising conclusion that senior longevity actually improved during the recession. The reasons are complicated and debatable but include reduced smoking and obesity and other adverse health behaviors that we "buy" with money but cut back on during harder times.

[See How to Increase Your Social Security Payments.]

However, any longevity dividend from a recession is short-lived, according to the study. Over longer time periods, the lingering effects of losing a job contribute to deteriorating health, including shorter life spans.

In normal times, it would be impossible to find what scientists call a control group—a big group of consumers willing to accept reductions in their incomes, lose their health insurance, and enjoy all the related health stresses of extended unemployment. Unfortunately, this is no problem during a recession, especially the steep one we began experiencing in 2007 and 2008.

So the Wellesley economists were able to look at what this big (and involuntary) control group did during and after economic downturns, and compare their health and longevity in later years with other people who did not have to contend with recessionary job losses. What they found, not surprisingly, is that "individuals who are approaching retirement when a recession hits may be particularly likely to suffer long-lasting negative consequences."

[See 8 Retirement Realities in a Stumbling Economy.]

Besides the financial and emotional stresses of not being able to find new jobs, older people who lost their jobs also tended to lose their health insurance and cut back on their use of healthcare services.

"Our results indicate that for workers in their late fifties and through age 61, any short-term positive health benefits associated with a recession are temporary and, ultimately, are more than offset by subsequent health deterioration," the research paper said. "Although we cannot definitively determine that reduced employment, insurance coverage, and health care use are the mechanisms underlying our mortality findings, we view all of them as plausible."

Looking at reduced life expectancy due solely to job losses and related employment cuts, they said, "a worker who lost their job at age 58 as a result of a recession could be expected to live three fewer years (19 years instead of 22) as a result." They acknowledge that the impact is hard to determine and might well be smaller. But the more compelling point is that a serious and long-lived decline in well-being occurs for older workers who lose their jobs.

[See the 10 Best Places for Older Employees.]

These negative effects on longevity, however, did not affect people who were in their early sixties. "We find that unemployment shocks at ages 57 to 61 have the biggest long-term effect on survival," they said, "while shocks at earlier (ages 55 to 56) or later (ages 62 to 65) ages have no significant long-term effect."

In other words, people who were further from retirement had time for their financial and physical well-being to recover. And those near the age at which they could begin taking early-retirement benefits from Social Security (age 62) or begin using Medicare insurance (age 65) did not suffer the kinds of ill health effects and reduced life spans as younger people in their later fifties.

"Interestingly, we find that unemployment shocks at or after age 62 have no long-term negative health effects," they concluded. "The availability of Social Security at age 62 and Medicare at age 65 may play an important role in this finding."