Despair and Decades-Long Deindustrialization

Christopher Ruhm of the University of Virginia has taken issue with Anne Case and Angus Deaton’s “Deaths of Despair” articles, writing that:

Deaths of Despair or Drug Problems?

The United States is in the midst of a fatal drug epidemic. This study uses data from the Multiple Cause of Death Files to examine the extent to which increases in county-level drug mortality rates from 1999-2015 are due to “deaths of despair”, measured here by deterioration in medium-run economic conditions…

The primary finding is that counties experiencing relative economic decline did experience higher growth in drug mortality than those with more robust growth, but the relationship is weak and mostly explained by confounding factors.

Case and Deaton replied:

When we proposed the term“deaths of despair,” we were choosing a label, not an explanation, and certainly not a purely economic one that Ruhm is adopting. Deaths of despair are suicides, deaths from alcohol-related liver diseases, and deaths from drug overdose. We are also amenable to the possibility that obesity and over-eating are in part responsible for the reversal in the decline of deaths from heart disease. We also suggested a tentative account, which is echoed in the term “deaths of despair.” We think of all of these deaths as suicides, by a very broad definition, and we attribute them to a broad deterioration in the lives of Americans without a college degree who entered adulthood after 1970.

This is about much more than economic circumstances and goes back much further than 1999. In our paper, we talk about morbidity as well as mortality, and while we recognize the deterioration inwages for those without a BA, we also focus on the decline in labor force participation, the decline in marriage rates, the rise of cohabitation, the rise in out of wedlock births, and of parents living apart from children that they barely know. We discuss the decline in the quality of jobs, the increasing lack of opportunity for people without a BA, as well as changing religious practices. We discuss the decline of unions, and the consequent loss of local, national, and workplace voice that workers once had. We discuss that many less-educated people have lives that are economically and socially inferior to those of their parents. Of course, economic decline is part of this story, but the characterization of our work by the change in economic circumstances from 1999 to 2015 is a caricature that should be rejected out of hand, as it is in the data.

 

I’m obviously sympathetic to both sides of this- both to Ruhm’s point that the opioid crisis is its own beast, driven in large part by factors specific to the medical system and the supply of illegal drugs and only indirectly by short-term economic conditions, and to Case and Deaton’s argument that a broad combination of factors, not all economic, conspired to disrupt life for Americans with less education over the last several decades. As Case and Deaton suggest,

a) Suicide and alcohol-based deaths are zooming up for this group, too, it’s not just opioids

Mortlality

b) The giant drops in marriage and married child-bearing, male labor force participation, civic participation and reported social trust, and increases in reported pain and disability for these groups (non-college middle aged whites) mean that there can be “despair” that isn’t well captured by changes in median income.

c) It might be that there’s a significant delay in how these effects are felt, which Ruhm’s design might not be well positioned to capture. For example, West Virginia had giant increases in mortality in this century (ie, since 2000), even though West Virginia’s economic outlook did not deteriorate significantly, in part due to the overall 2000s resource boom and in part because West Virginia whites were already very poor compared to elsewhere in the country, and already experienced much of the social dislocation (increase in welfare and disability dependency, for example) that hit other states subsequently.

image-1

That is, some places, due to a combination of pre-existing economic and cultural factors, are essentially less resistant to the spread of an epidemic like the opioid crisis that emerges subsequently, but that doesn’t mean you can dismiss those pre-existing conditions. It may be that within recent years, the variation in economic conditions is not predictive of where mortality has increased, but that communities were essentially “immunocompromised” to resisting drug abuse, alcoholism, suicide, and a collapse in social trust by earlier changes.

One someway tangential issue that perhaps is well known but worth repeating is just how continuous the deindustrialization and deunionization of the particular portion of the population Case and Deaton highlight (45-54 year old whites without college degrees)  has been. This process began decades ago but sped up in the mid-90s. Judging from the Census’s Current Population Survey, women have had a proportionally larger decrease in manufacturing employment (they are less than half as likely to be working in manufacturing as in 1979) while men have had a larger decrease in unionization:

manufmaleunionmembership

One hypothesis is that it was not the expansion of free trade in of itself (or changes in labor market regulation or the unions’ own missteps) that made American manufacturing less competitive, but the combination of these processes with a floating exchange rate and the dollar’s continued status as a reserve currency.

One way I would interpret this is that the gigantic, rapidly increasing quantities of foreign, dollar-denominated investment over the last few decades kept the value of the dollar from reducing in response to massive trade imbalances, and kept those massive trade imbalances (in the short term) sustainable.

foreignholdingsofu-s-treasuriesfrommarch2000tojune2012.png

This made American consumers proportionally richer and made American exports less competitive. Was this a deliberate decision by China and other exporters, who knew their own economic growth could only sustain itself as long as American consumers could keep buying? I’m not sure, but it does clarify why neither American politicians nor foreign lenders are ever that eager for our federal government to stop borrowing so much money- not only the U.S.’s internal political economy but much of our relationship to the rest of the world is supported by continuously issuing more dollar-denominated debt. Massive federal deficits are required by the current account trade deficit (and perhaps visa versa). In this way, “borrowing money from China” becomes not a result mainly of spendthrift politicians and voters, but itself a linchpin of global order. One side effect of this, though, is that the segment of our population that previously was most embedded in export industries and manufacturing is left out in the cold.

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