This paper investigates the relationship between health and the business cycle for the Canadian economy. The majority of existing literature shows a procyclical relationship between death rates and indicators of the business cycle, suggesting that recessions are good for one’s health. We use a time series error correction model to determine the short-run and long-run impacts of the unemployment rates on death rates. Our results indicate that temporary slowdowns in economic activity are associated with lower death rates. Moreover, once we stratify the data by sex, we find a long-run negative relationship between the unemployment rate and death rates for both sexes. 1. Introduction In a series of influential works, Ruhm [1–4] provides strong evidence of a procyclical relationship between the business cycle and mortality, which suggests that recessions are good for a population’s health. (In Ruhm [4] a one percentage point decrease in unemployment rate is predicted to increase heart attack mortality (AMI) by 1.3%.) Ruhm’s findings for the USA have been confirmed in studies for Germany [5], Spain [6], and Japan [7]. This relationship is also found in developing countries. Specifically, Khang et al. [8] find a positive relationship for South Korea, and Abdala et al. [9] find it for Argentina. The procyclicality of death has also been shown in panel studies of OECD and EU countries in Gerdtham and Ruhm [10] and McAvinchey [11], respectively. Despite the large literature showing that temporary downturns in economic activity are good for one’s health, Gerdtham and Johannesson [12] and Svensson [13] find a countercyclical relationship between mortality rates and the business cycle in Sweden. Hence, the procyclical relationship between mortality and the business cycle cannot be generalized to all countries. In a 2011 paper, Arizumi and Schirle use Canadian data to assess the role of the business cycle on health. They use a time series model and largely confirm the results of Ruhm [1]. In this paper, we take a different approach from that of Arizumi and Schirle [14] in analyzing the relationship between the business cycle (via the unemployment rate) and mortality, at the aggregate level as well as by gender. First, we use an error correction model, which allows us to specifically assess the short-run and long-run impacts of unemployment rate on mortality. This approach implies that we can also quantify the speed of adjustment, thus determining how long after a rise in unemployment are mortality rates affected. Next, given our model, we make use of data available
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