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The global financial crisis and health equity: early experiences from Canada.

Ruckert A, Labonté R - Global Health (2014)

Bottom Line: It is widely acknowledged that austerity measures in the wake of the global financial crisis are starting to undermine population health results.This article documents some of the effects of financial crisis and severe economic decline on health equity in Canada.However, more research is necessary to study policy choices that could mitigate this effect.

View Article: PubMed Central - HTML - PubMed

Affiliation: Institute of Population Health, University of Ottawa, Room 216A, 1 Stewart Street, Ottawa, ON K1N 6 N5, Canada. aruckert@uottawa.ca.

ABSTRACT

Background: It is widely acknowledged that austerity measures in the wake of the global financial crisis are starting to undermine population health results. Yet, few research studies have focused on the ways in which the financial crisis and the ensuing 'Great Recession' have affected health equity, especially through their impact on social determinants of health; neither has much attention been given to the health consequences of the fiscal austerity regime that quickly followed a brief period of counter-cyclical government spending for bank bailouts and economic stimulus. Canada has not remained insulated from these developments, despite its relative success in maneuvering the global financial crisis.

Methods: The study draws on three sources of evidence: A series of semi-structured interviews in Ottawa and Toronto, with key informants selected on the basis of their expertise (n = 12); an analysis of recent (2012) Canadian and Ontario budgetary impacts on social determinants of health; and documentation of trend data on key social health determinants pre- and post the financial crisis.

Results: The findings suggest that health equity is primarily impacted through two main pathways related to the global financial crisis: austerity budgets and associated program cutbacks in areas crucial to addressing the inequitable distribution of social determinants of health, including social assistance, housing, and education; and the qualitative transformation of labor markets, with precarious forms of employment expanding rapidly in the aftermath of the global financial crisis. Preliminary evidence suggests that these tendencies will lead to a further deepening of existing health inequities, unless counter-acted through a change in policy direction.

Conclusions: This article documents some of the effects of financial crisis and severe economic decline on health equity in Canada. However, more research is necessary to study policy choices that could mitigate this effect. Since the policy response to a similar set of economic shocks has globally varied and led to differential health and health equity outcomes, comparative studies are now possible to assess the successes and failures of specific policy responses. This raises the question of what types of public policy can mitigate against the negative health equity effects of severe economic recessions.

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Share of average after-tax income.
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Figure 4: Share of average after-tax income.

Mentions: This is happening in a context of growing social inequalities in Canada, including deepening income inequalities as evidenced by a growing share of income going to the top 0.1% and 1% of Canadian income earners (see Figure 4) and a rise in the GINI coefficient over the last two decades (see Figure 5). During this period, income inequality has been growing faster than in all but one other OECD country, with tax policies becoming less effective at reducing inequality [39]. Since the onset of the GFC, the concentration of income in the hands of the richest 1% is down somewhat from the pre-GFC peak; however, the GINI coefficient has decreased only insignificantly. In addition, since 2010, the latest available data on income trends, the stock market has returned to new heights while median family income remains below the 2008 peak (at $57,000 in 2011 compared to $58,100 in 2008), indicating that income inequality has likely deteriorated since then. Due to the fact that the majority of income (around 68%) for people in the lowest income decile is derived from government transfers, the above discussed decline in non-market income support through cutbacks to government transfers will likely further undermine income inequality in the near future. As one informant noted: “If you look at the social determinants of health there’s a range of factors which are currently being undermined…and…the financial crisis is increasing social inequalities and that again will undermine social determinants of health in various areas”.


The global financial crisis and health equity: early experiences from Canada.

Ruckert A, Labonté R - Global Health (2014)

Share of average after-tax income.
© Copyright Policy - open-access
Related In: Results  -  Collection

License
Show All Figures
getmorefigures.php?uid=PMC3974147&req=5

Figure 4: Share of average after-tax income.
Mentions: This is happening in a context of growing social inequalities in Canada, including deepening income inequalities as evidenced by a growing share of income going to the top 0.1% and 1% of Canadian income earners (see Figure 4) and a rise in the GINI coefficient over the last two decades (see Figure 5). During this period, income inequality has been growing faster than in all but one other OECD country, with tax policies becoming less effective at reducing inequality [39]. Since the onset of the GFC, the concentration of income in the hands of the richest 1% is down somewhat from the pre-GFC peak; however, the GINI coefficient has decreased only insignificantly. In addition, since 2010, the latest available data on income trends, the stock market has returned to new heights while median family income remains below the 2008 peak (at $57,000 in 2011 compared to $58,100 in 2008), indicating that income inequality has likely deteriorated since then. Due to the fact that the majority of income (around 68%) for people in the lowest income decile is derived from government transfers, the above discussed decline in non-market income support through cutbacks to government transfers will likely further undermine income inequality in the near future. As one informant noted: “If you look at the social determinants of health there’s a range of factors which are currently being undermined…and…the financial crisis is increasing social inequalities and that again will undermine social determinants of health in various areas”.

Bottom Line: It is widely acknowledged that austerity measures in the wake of the global financial crisis are starting to undermine population health results.This article documents some of the effects of financial crisis and severe economic decline on health equity in Canada.However, more research is necessary to study policy choices that could mitigate this effect.

View Article: PubMed Central - HTML - PubMed

Affiliation: Institute of Population Health, University of Ottawa, Room 216A, 1 Stewart Street, Ottawa, ON K1N 6 N5, Canada. aruckert@uottawa.ca.

ABSTRACT

Background: It is widely acknowledged that austerity measures in the wake of the global financial crisis are starting to undermine population health results. Yet, few research studies have focused on the ways in which the financial crisis and the ensuing 'Great Recession' have affected health equity, especially through their impact on social determinants of health; neither has much attention been given to the health consequences of the fiscal austerity regime that quickly followed a brief period of counter-cyclical government spending for bank bailouts and economic stimulus. Canada has not remained insulated from these developments, despite its relative success in maneuvering the global financial crisis.

Methods: The study draws on three sources of evidence: A series of semi-structured interviews in Ottawa and Toronto, with key informants selected on the basis of their expertise (n = 12); an analysis of recent (2012) Canadian and Ontario budgetary impacts on social determinants of health; and documentation of trend data on key social health determinants pre- and post the financial crisis.

Results: The findings suggest that health equity is primarily impacted through two main pathways related to the global financial crisis: austerity budgets and associated program cutbacks in areas crucial to addressing the inequitable distribution of social determinants of health, including social assistance, housing, and education; and the qualitative transformation of labor markets, with precarious forms of employment expanding rapidly in the aftermath of the global financial crisis. Preliminary evidence suggests that these tendencies will lead to a further deepening of existing health inequities, unless counter-acted through a change in policy direction.

Conclusions: This article documents some of the effects of financial crisis and severe economic decline on health equity in Canada. However, more research is necessary to study policy choices that could mitigate this effect. Since the policy response to a similar set of economic shocks has globally varied and led to differential health and health equity outcomes, comparative studies are now possible to assess the successes and failures of specific policy responses. This raises the question of what types of public policy can mitigate against the negative health equity effects of severe economic recessions.

Show MeSH
Related in: MedlinePlus