Abstract
The healthcare sector was one of the few sectors of the US economy that created new positions in spite of the recent economic downturn. Economic contractions are associated with worsening morbidity and mortality, declining private health insurance coverage, and budgetary pressure on public health programs. This study examines the causes of healthcare employment growth and workforce composition in the US and evaluates the labor market’s impact on healthcare spending and health outcomes. Data are collected for 50 states and the District of Columbia from 1999–2009. Labor market and healthcare workforce data are obtained from the Bureau of Labor Statistics. Mortality and health status data are collected from the Centers for Disease Control and Prevention’s Vital Statistics program and Behavioral Risk Factor Surveillance System. Healthcare spending data are derived from the Centers for Medicare and Medicaid Services. Dynamic panel data regression models, with instrumental variables, are used to examine the effect of the labor market on healthcare spending, morbidity, and mortality. Regression analysis is also performed to model the effects of healthcare spending on the healthcare workforce composition. All statistical tests are based on a two-sided \(\alpha \) significance of \(p\,<\) .05. Analyses are performed with STATA and SAS. The labor force participation rate shows a more robust effect on healthcare spending, morbidity, and mortality than the unemployment rate. Study results also show that declining labor force participation negatively impacts overall health status (\(p\,<\) .01), and mortality for males (\(p\,<\) .05) and females (\(p\,<\) .001), aged 16–64. Further, the Medicaid and Medicare spending share increases as labor force participation declines (\(p\,<\) .001); whereas, the private healthcare spending share decreases (\(p\,<\) .001). Public and private healthcare spending also has a differing effect on healthcare occupational employment per 100,000 people. Private healthcare spending positively impacts primary care physician employment (\(p\,<\) .001); whereas, Medicare spending drives up employment of physician assistants, registered nurses, and personal care attendants (\(p\,<\) .001). Medicaid and Medicare spending has a negative effect on surgeon employment (\(p\,<\) .05); the effect of private healthcare spending is positive but not statistically significant. Labor force participation, as opposed to unemployment, is a better proxy for measuring the effect of the economic environment on healthcare spending and health outcomes. Further, during economic contractions, Medicaid and Medicare’s share of overall healthcare spending increases with meaningful effects on the configuration of state healthcare workforces and subsequently, provision of care for populations at-risk for worsening morbidity and mortality.
Similar content being viewed by others
References
Bartley, M. (1987). Unemployment and health: Causation or selection—a false antithesis? Sociology of Health and Illness, 10, 41–67.
Berkowitz, M., & Johnson, W. G. (1974). Health and labor force participation. Journal of Human Resources, 9, 117–128.
Bockerman, P., & Ilmakunnas, P. (2009). Unemployment and self-assessed health: Evidence from panel data. Health Economics, 18(2), 161–179.
Brenner, M. H., & Mooney, A. (1983). Unemployment and health in the context of economic change. Social Science and Medicine, 17(16), 1125–1138.
Browning, M., & Moller Dano, A. (2006). Job displacement and stress related health outcomes. Health Economics, 15(10), 1061–1075.
Bureau of Economic Analysis. (2013). Regional economic accounts: State annual personal income and employment. Retrieved, from http://bea.gov/regional/index.htm/
Bureau of Labor Statistics. (2013a). Consumer price index. Retrieved, from http://www.bls.gov/cpi/
Bureau of Labor Statistics. (2013b). Labor force statistics from the local area unemployment statistics survey. Retrieved, from http://www.bls.gov/lau/
Bureau of Labor Statistics. (2013c). Occupational employment statistics. Retrieved, from http://www.bls.gov/oes/
Cai, L. (2010). The relationship between health and labour force participation: Evidence from a panel data simultaneous equation model. Labour Economics, 17(1), 77–90.
Cai, L., & Kalb, G. (2006). Health status and labour force participation: Evidence from Australia. Health Economics, 15(3), 241–261.
Catalano, R. (1991). The health effects of economic insecurity. American Journal of Public Health, 81, 1148–1152.
Catalano, R. (2009). Health, medical care, and economic crisis. New England Journal of Medicine, 360, 749–751.
Catalano, R., Goldman-Mellor, S., Saxton, K., Margerison-Zilko, C., Subbaraman, M., LeWinn, K., et al. (2011). The health effects of economic decline. Annual Review of Public Health, 32, 431–450.
Connelly, J. E., Philbric, J. T., Smith, R. G., Kaiser, D. L., & Wymer, A. (1989). Health perceptions of primary care patients and the influence on health care utilization. Medical Care, 27, S99–S109.
Cawley, J., & Simon, K. L. (2005). Health insurance coverage and the macroeconomy. Journal of Health Economics, 24(2), 299–315.
Centers for Disease Control and Prevention. (2013a). The behavioral risk factor surveillance system (BRFSS). Retrieved, from http://www.cdc.gov/brfss/
Centers for Disease Control and Prevention. (2013b). WONDER online databases. Retrieved, from http://wonder.cdc.gov/
Centers for Disease Control and Prevention. (2013c). Bridged-race population estimates. Retrieved, from http://wonder.cdc.gov/bridged-race-population.html
Centers for Medicare and Medicaid Services. (2013a). Medicaid. Retrieved, from http://www.medicaid.gov/
Centers for Medicare and Medicaid Services. (2013b). Medicare. Retrieved, from http://www.cms.gov/Medicare/Medicare.html
Centers for Medicare and Medicaid Services. (2013c). Medicaid statistical information system (MSIS). Retrieved, from http://www.medicaid.gov
Chirikos, T. N. (1993). The relationship between health and labor market status. Annual Review of Public Health, 14(1), 293–312.
Crossley, T. F., & Kennedy, S. (2002). The reliability of self-assessed health status. Journal of Health Economics, 21, 643–658.
Dooley, D., Fielding, J., & Levi, L. (1996). Health and unemployment. Annual Review of Public Health, 17, 449–465.
Edwards, R. (2008). Who is hurt by procyclical mortality? Social Science & Medicine, 67(12), 2051–2058.
Fihn, S. D., & Wicher, J. B. (1988). Withdrawing routine outpatient medical services, effects on access and health. Journal of General Internal Medicine, 3, 356–362.
Finkelstein, A. (2007). The aggregate effects of health insurance: Evidence from the introduction of Medicare. The Quarterly Journal of Economics, 122(1), 1–37.
Finkelstein, A., Taubman, S., Wright, B., Bernstein, M., Gruber, J., Newhouse, J. P., et al. (2012). The Oregon health insurance experiment: Evidence from the first year. The Quarterly Journal of Economics, 127(3), 1057–1106.
Fisher, E. S. (2003). Medical care—is more always better? New England Journal of Medicine, 349(17), 1665–1667.
Franks, P., Gold, M. R., & Fiscella, K. (2003). Sociodemographics, self-rated health, and mortality in the US. Social Science and Medicine, 56, 2505–2514.
Frey, J. J. (1982). Unemployment and health in the United States. British Medical Journal (Clinical Research Edition), 284(6322), 1112–1113.
Garcy, A., & Vågerö, D. (2012). The length of unemployment predicts mortality differently in men and women, and by cause of death: A six year mortality follow-up of the Swedish 1992–1996 recession. Social Science and Medicine, 74, 1911–1920.
Gerdtham, U. G., & Johannesson, M. (2003). A note on the effect of unemployment on mortality. Journal of Health Economics, 22(3), 505–518.
Gerdtham, U. G., & Ruhm, C. J. (2006). Deaths rise in good economic times: Evidence from the OECD. Economics of Human Biology, 4, 298–316.
Idler, E. L., & Benyamini, Y. (1997). Self-rated health and mortality: A review of twenty-seven community studies. Journal of Health and Social Behaviour, 38, 21–37.
Janlert, U. (1997). Unemployment as a disease and diseases of the unemployed. Scandinavian Journal of Work and Environmental Health, 23(Suppl. 3), 79–83.
Jin, R. L., Shah, C. P., & Svoboda, T. J. (1995). The impact of unemployment on health: A review of the evidence. Canadian Medical Association Journal, 153(5), 529–540.
Kasl, S. V., Gore, S., & Cobb, S. (1975). The experience of losing a job: Reported changes in health, symptoms and illness behavior. Psychosomatic Medicine, 37(2), 106–122.
Levy, H., & Meltzer, D. (2008). The impact of health insurance on health. Annual Review of Public Health, 29, 399–409.
Marquis, M. S., & Long, S. H. (2001). Employer health insurance and local labor market conditions. International Journal of Health Care Finance and Economics, 1(3), 273–292.
McCallum, J., Shadbolt, B., & Wang, D. (1994). Self-rated health and survival: A 7 year follow-up study of Australian elderly. American Journal of Public Health, 847, 1100–1105.
Moser, K., Goldblatt, P. O., Fox, A. J., & Jones, D. R. (1987). Unemployment and mortality. British Medical Journal, 294, 509.
Neumayer, E. (2004). Recessions lower (some) mortality rates: Evidence from Germany. Social Science and Medicine, 58, 1037–1047.
Newhouse, J. P. (1996). Reimbursing health plans and health providers: Efficiency in production versus selection. Journal of Economic Literature, 34(3), 1236–1263.
Pellegrini, L. C., & Rodriguez-Monguio, R. (2013). Unemployment, Medicaid provisions, the mental health industry, and suicide. The Social Science Journal, 50(4), 482–490.
Perreira, K. M. (2006). Crowd-in: The effect of private health insurance markets on the demand for Medicaid. Health Services Research, 41(5), 1762–1781.
Roelfs, D. J., Shor, E., Davidson, K. W., & Schwartz, J. E. (2011). Losing life and livelihood: A systematic review and meta-analysis of unemployment and all-cause mortality. Social Science and Medicine, 72, 840–854.
Ruhm, C. J. (2000). Are recessions good for your health? Quarterly Journal of Economics, 115(2), 617–650.
Ruhm, C. J. (2003). Good times make you sick. Journal of Health Economics, 22(3), 637–658.
Ruhm, C. J. (2005). Healthy living in hard times. Journal of Health Economics, 24, 341–363.
Starfield, B., Shi, L., & Macinko, J. (2005). Contribution of primary care to health systems and health. Milbank Quarterly, 83, 457–502.
Tapia Granados, J. A. (2005). Increasing mortality during the expansions of the US economy, 1900–1996. International Journal of Epidemiology, 34, 1194–1202.
US Department of Labor: Employment and Training Administration. (2013). State Unemployment Insurance (SUI). Retrieved, from http://www.doleta.gov/
Wadsworth, M. E. J., Montgomery, S. M., & Bartley, M. J. (1999). The persisting effect of unemployment on health and social well-being in men early in working life. Social Science and Medicine, 48(10), 1491–1499.
Acknowledgments
Authors would like to thank the editor and two referees for useful comments and suggestions.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Pellegrini, L.C., Rodriguez-Monguio, R. & Qian, J. The US healthcare workforce and the labor market effect on healthcare spending and health outcomes. Int J Health Care Finance Econ 14, 127–141 (2014). https://doi.org/10.1007/s10754-014-9142-0
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10754-014-9142-0