Economics Explained
Why 40,000 People Die for Every 1% Increase in Unemployment - The Big Short
Sep 8, 2020
Exploring the claim from 'The Big Short' movie about the correlation between unemployment and death, the emotional and economic challenges faced by the unemployed, the conflicting death toll numbers associated with unemployment, and the consequences of unemployment on individuals and welfare systems.
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Quick takeaways
- A 1% increase in unemployment leads to an estimated 10,400 deaths in the USA, primarily caused by increased stress, limited healthcare access, heart disease, substance abuse, suicides, and homicides.
- Nations with stronger social welfare systems, like Denmark, have less correlation between unemployment and death tolls due to government support for education and training, mitigating the negative impacts of unemployment.
Deep dives
The Claim of 40,000 Deaths per 1% Increase in Unemployment
In the movie 'The Big Short,' it was claimed that for every 1% increase in unemployment, 40,000 people would die. However, the actual figure from the 1981 book 'Corporate Flight' is 37,000 deaths. The study found that long-term structural unemployment led to increased stress, limited access to healthcare, and a higher risk of heart disease, substance abuse, suicides, and homicides. A more recent medical study concluded that the risks of death increase by 63% when people lose their jobs, but the actual figure would be around 10,400 deaths with a 1% increase in unemployment in the USA.
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