Changing relationship between unemployment and mortality in South Korea: 1989-2012

Chulhee Lee, Seoul National University

This study provides the first evidence on the effect of business cycle on health in South Korea that is comparable to the growing international literature. Mortality changes in South Korea were generally pro-cyclical between 1989 and 2012, as suggested by other studies. For the period between 2001 and 2012, however, a strong positive relationship between unemployment and mortality emerges. The positive effect of unemployment on mortality in recent years is strongly revealed only for individuals with low educational attainment. Cancers and diseases of the digestive system played particularly important roles in changing the direction of the effect of unemployment on mortality. We hypothesize that positive income effects of economic prosperity became strong enough to dominate negative influences of booms during the 2000s. We provide evidence suggesting that the extended protection of the National Health Insurance during the 2000s was one of the contributing factors. This study suggests that the relationship between business cycle and health may differ across times and places, depending on institutional and environmental factors that are related to the relative strength of positive and negative influences of economic booms.