European Business Schools Librarian's Group

Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics

Does Fiscal Consolidation Really Get You Down? Evidence from Suicide Mortality

Nikolaos Antonakakis (), Nikolaos Antonakakis () and Alan Collins ()
Additional contact information
Nikolaos Antonakakis: Department of Economics, Vienna University of Economics and Business
Nikolaos Antonakakis: Economics and Finance Subject Group, Portsmouth Business School, University of Portsmouth
Alan Collins: Economics and Finance Subject Group, Portsmouth Business School, University of Portsmouth

Abstract: While linkages between some macroeconomic phenomena (e.g. unemployment, GDP growth) and suicide rates in some countries have been explored, only one study, hitherto, has established a causal relationship between fiscal consolidation and suicide, albeit in a single country. This study examines the impact of budget consolidation on suicide mortality across all Eurozone peripheral economies, while controlling for various economic and sociodemographic differences. The impact of fiscal adjustments is found to be gender, age and time specific. In particular, fiscal consolidation has short-, medium- and long-run suicide increasing effects on the male population between 65 and 89 years of age. A one percentage point reduction in government spending is associated with an 1.39%, 2.35% and 2.64% increase in the short-, medium- and long-run, respectively, of male suicides rates between 65 and 89 years of age in the Eurozone periphery. These results are highly robust to alternative measures of fiscal consolidation. Unemployment benefits and substantial employment protection legislation seem to mitigate some of the negative effects of fiscal consolidation on suicide mortality. Plausible explanations for these impacts are provided and policy implications drawn.

Keywords: Fiscal consolidation, Suicide, Eurozone periphery, Government policy, Labour market institutions

JEL-codes: H30; H51; H55; H62; I18; I31; J18; C33 September 2014

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