The health effects of the global financial crisis

Abstract

In 2008, the world experienced the worst financial crisis since the Great Depression. The crisis is often described in relation to its proximal risk factors such as the proliferation of risky loans and mortgage-based securities, but the root causes of the Great Recession include distal risk factors such as indiscriminate capital flow, excessive financial deregulation and high concentration of wealth in the top distribution. Ultimately, the crisis is a by-product of neoliberal policies and the “self-correcting market†ideology that guided national and global macroeconomic reforms since the 1970s. Evidence indicates that the Great Recession led to increases in unemployment and suicides, especially in Europe and in the United States. Estimates based on the effects of previous economic downturns suggest that the crisis produced negative health and nutritional outcomes in developing countries. Data, however, also shows that crises can be characterized by increases in life expectancy at birth. These favorable trends seem more likely to be experienced by countries with a more egalitarian distribution of income and stronger social protections that can decouple the link between unemployment and suicides during crises. New rules and regulations at the national and global level are needed to prevent future financial crises. Redistribution of wealth and investments in social protection are necessary for the safeguard of health in times of economic recession.