Unemployment can lead to earlier death

The stress of unemployment can reduce life expectancy. Two economists, Daniel Sullivan of the Federal Reserve Bank of Chicago and Till von Wachter of Columbia University, crunched the numbers. From their 2009 paper (pdf available here):

Our estimates suggest a 50-100% increase of the mortality hazard during the years immediately following job loss. The estimated impact of displacement on annual mortality rates declines substantially over time, but appears to converge to a 10-15% increase in the hazard rate. If these increases last beyond the 25-year window we follow, they would imply a loss in life expectancy of 1.0-1.5 years for workers displaced in middle age. In contrast, we find little effect of job loss on mortality for workers displaced near retirement age.

Several economic models of health determination predict that a decline in lifetime resources should raise mortality. Our empirical findings are consistent with a reduction in such resources leading to reduced investments in health or chronic stress that, in turn, lead to a smaller, but longer-term increase in the mortality hazard.  Increased earnings instability may also contribute to chronic stress and a long-run increase in mortality.