Recessions Are Good for Nursing Homes

Nursing homes are chronically understaffed in times of economic prosperity. But…a one percent increase in unemployment sees full time employment in nursing facilities rise three times as fast. After a recession, when the economy picks back up and jobs become available again, low skilled workers abandon nursing homes jobs’ low pay and even fewer accolades for better prospects. The shift of workers in and out of nursing jobs drives the swings in the national death rate and underscores the importance of these under-appreciated jobs.

A look at the relationship between economic downturns and health outcomes in the United States reveals a complex picture: harm from lost insurance and increased anxiety but better care for the elderly. These two trends coexist because, while harm concentrates in working age people, retirees reap the majority of the benefit.

Neal Emery in The Atlantic. HT: Tyler Cowen.

Comments (9)

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  1. Cindy says:

    Surely there’s a better way to improve elder-care than to have a recession, though. This should be a wake-up call that there need to be better incentives to enter that field than there are now, but I am not even sure what the solution would be.

  2. Devon Herrick says:

    This is an interesting concept. Nursing homes are labor-intensive, and employ workers whose tasks are grueling, but straightforward and easy to learn. Thus, a profit strategy is to hire low-skilled workers and under-pay them. These firms suffer rapid turnover and probably need a relatively high ratio of supervisors to workers. Life is good for these firms when the economy is bad; the quality of workers at a given wage rate is higher during recession. Their business model becomes more difficult when good workers have more options.

  3. Studebaker says:

    Nursing homes are chronically understaffed in times of economic prosperity. But…

    This sort of reminds me of Home Depot!

  4. Bill Radiar says:

    Well thats at least one good thing about this recession, I guess.

  5. Saul says:

    Well, this is a sad reality. I know that a few of the nurses that I know always thought of nursing home in a negative light as far as employment is concerned. I dont know if nurses like the fast passed atmosphere of a hospital, but they do not prefer nursing homes.

  6. seyyed says:

    very interesting

  7. Spencer says:

    These workers that go in and out nursing homes are surely not the ones to do this kind of job. The elderly need people that actually care for them and have their best interest. These workers seem to not be very motivated to offer seniors what they need and, in that case, perhaps they are better off working somewhere else. Maybe this way more appropriate and qualified workers will join these nursing homes staff.

  8. Afton says:

    The article points out how this lead do a decrease in mortality despite “robbing them of insurance and exacerbating psychological stress”.

    This link is obviously not proven, but an interesting idea.

  9. Jordan says:

    Hm. It’d be interesting to see how many elderly in nursing homes are actually in charge of their finances. Maybe that’s their super power.. nursing home staffers are immune to market forces