Elsevier

Economic Systems

Volume 41, Issue 2, June 2017, Pages 266-278
Economic Systems

Revisiting the relationship between suicide and unemployment: Evidence from linear and nonlinear cointegration

https://doi.org/10.1016/j.ecosys.2016.06.004Get rights and content

Highlights

  • Suicide rates are pro-cyclical with respect to the business cycle in the US.

  • ARDL identifies symmetric responses of suicide rates to the unemployment rate.

  • NARDL verifies asymmetric responses of suicide rates to the unemployment rate.

  • Economic expansion has a greater impact on the suicide rates for individuals aged over 45 than economic recession.

Abstract

This study employs the linear and nonlinear ARDL cointegration methodologies to examine the potential symmetric and asymmetric responses of suicide rates to unemployment rates in the US from 1928 to 2013. Our results suggest that suicide rates are pro-cyclical with respect to the business cycle (measured by changes in the unemployment rate) after extensively controlling for divorce and fertility rates. Unemployment has symmetric long-run effects on the age-adjusted suicide rate and four age-specific (from ages 25–34 to 55–64) suicide rates, while the effect of an economic expansion on suicide rates for those aged over 45 is greater than the effect of an economic recession. These findings imply that the effect of an economic expansion on the decrease of the suicide rate is higher than the effect of an economic recession on the increase of the suicide rate for individuals aged over 45. Therefore, intervention designed to reduce suicidal behaviors should emphasize periods of economic recession more than periods of economic expansion for those of middle age and beyond.

Introduction

In his seminal work ‘Le suicide’, Durkheim (1951) argued that economic fluctuations could modify psychiatric pathology, potentially leading to suicide. Since then, many studies have investigated the relationship between suicide and unemployment. For example, Chen et al. (2012) and Milner et al., 2013a, Milner et al., 2013b reviewed hundreds of studies on the socio-economic determinants of suicide, among which unemployment was proved to be a key determinant of suicide. Furthermore, Milner et al., 2013a, Milner et al., 2013b conducted a systematic review and meta-analysis to investigate the relationship between long-term unemployment and suicide. Their review identified 16 eligible studies out of 10,358 studies published since 1980, and findings generated from their random effect meta-analysis suggested that long-term unemployment is associated with greater incidence of suicide. Milner et al. (2014) extended their previous systematic review and meta-analysis and further confirm the existence of a causal relationship between unemployment and suicide, with greater exposure to unemployment being associated with a higher relative risk of suicide. Based on the above comprehensive literature surveys and meta-analysis research, unemployment is widely considered one of the most significant determinants of suicide.

It is important to address that the empirical studies investigated in the aforementioned comprehensive literature surveys and meta-analysis research implicitly assume a symmetric relationship between suicide and unemployment, meaning that the effect of an increase of unemployment on suicides is the same as the effect of a decrease of unemployment on suicides. Although the asymmetric relationship between two economic variables has long been a concern for economists (Atil et al., 2014, Gozhor, 2014, Tiwari, 2014, Greenwood-Nimmo and Shin, 2013, Verheven, 2013, Delatte and Lopez-Villavicencio, 2012, Hatemi-J, 2012a, Hatemi-J, 2012b, Katrakilidis and Trachanas, 2012, Katrakilidis et al., 2012, Mocan and Bali, 2010), studies investigating the potential asymmetric effects of unemployment on suicide rates are limited (Lin and Chen, 2015, Wu and Cheng, 2010). To the best of our knowledge, Wu and Cheng (2010) and Lin and Chen (2015) could be the only two studies to address the possibility that unemployment has asymmetric effects on suicide rates. Although the asymmetric specifications used in Wu and Cheng (2010) and Lin and Chen (2015) identify the existence of asymmetric effects of unemployment on suicide rates, their results are restricted to the short-run relationship.

In order to establish an empirical model with a strong theoretical foundation that can simultaneously test for the existence of short- and long-run asymmetric effects of unemployment on suicide rates, we employ the newly developed nonlinear autoregressive distributed lags (NARDL) model proposed by Shin et al. (2014) to examine the relationship between unemployment and suicide rates in the US from 1928 to 2013. The NARDL model has several appealing features. First, it provides a dynamic error-correction specification allowing for asymmetric responses of suicide rates to positive and negative changes in the unemployment rate. Second, the long-run cointegrating relationship between unemployment and suicide rates can be determined by a bound test regardless if the series are integrated of order zero or one (I(0) or I(1)). Third, the asymmetric propagation mechanism of an economic shock on suicide rates across a period of time can easily be captured by the dynamic multipliers generated from the dynamic error-correction specification of the NARDL model. The results generated by our model specification incorporating asymmetries will provide a complete picture for the relationship between suicide and unemployment rates.

This study is organized as follows. Section 2 provides a literature review, while Section 3 discusses the linear and nonlinear ARDL models. Section 4 describes the data, and Section 5 presents the empirical results. Section 6 offers some policy implications and the conclusions of this study.

Section snippets

Literature review

Suicides have been marked in the aftermath of the recent severe global economic crisis (since 2007) in terms of the dramatic rise in unemployment rates. This phenomenon has been well documented for various regions such as Europe (Baumbach and Gulis, 2014, Reeves et al., 2014, Lannani et al., 2015, Norström and Grönqvist, 2015) and specific countries such as the United Kingdom (Barr et al., 2012, Coope et al., 2014), the United States (Reeves et al., 2012, Phillips and Nugent, 2014), Greece (

The linear and nonlinear ARDL models

This study employs linear ARDL (Pesaran and Shin, 1999, Pesaran et al., 2001) and the novel nonlinear ARDL (Shin et al., 2014) cointegration methodologies. The standard linear ARDL(p,q) cointegration model (Pesaran and Shin, 1999, Pesaran et al., 2001) with four variables series has the following form:Δyt=μ+ρyt1+θxt1+γzt1+λwt1+Σj=1p1αjΔytj+Σj=0q1πjΔxtj+Σj=1r1ϕjΔztj+Σj=1s1φjΔwtj+utwhere ut is an iid stochastic process. Δ is the difference operator. yt, xt, zt, and wt(t = 1,2, …, T)

Data

The main purpose of this study is to investigate the asymmetric response of suicide rates to the unemployment rate in the US from 1928 to 2013. Previous studies have suggested that divorce and fertility rates are possible socio-economic determinants of suicide (Schaede, 2013, Chen et al., 2012, Classen and Dunn, 2011, Andrés et al., 2010). Thus, we used the divorce rate (defined as the number of divorces/1000 people) and the general fertility rate (defined as the number of births/1000 women

Empirical results

The linear ARDL and the NARDL cointegration methodologies do not require the restrictive assumption that all series are integrated of the same order, thus allowing for the inclusion of both I(0) and I(1) time series in a long-run relationship. However, the presence of I(2) variables renders the computed FPSS statistic invalid (Pesaran et al., 2001). Table 2 presents the results from the ADF unit root tests (Augmented Dickey and Fuller, 1979). The results suggest that the examined series are

Conclusion

Asymmetries in economic phenomena have received considerable attention in various domains of applied economic analysis. However, socio-economists and sociologists have not paid much attention to the effects of a potential asymmetric suicide cycle on the socio-economic determinants of suicide. In this study, we adopted the ARDL model and the novel NARDL model to examine the response of suicide rates to changes in the US unemployment rate from 1928 to 2013. After extensively controlling for

Acknowledgements:

The authors would like to thank the Editor, Ali M. Kutan, Emmanouil Trachanas and two anonymous referees for their insightful comments and suggestions that allowed us to improve the quality of this study. The final proof-reading of the study by Lisa Brutcher (at Washington State University, USA) is gratefully acknowledged. All errors are ours.

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