New study rejects mortality-privatization link

In a posting back in March of 2009 I asked Did post-communist privatisation kill? I noted that this was an interesting question and one for which the medical journal Lancet argues the answer is "yes". An article, by David Stuckler, Lawrence King and Martin McKee - "Mass Privatisation and the Post-Communist Mortality Crisis: A Cross-National Analysis" - Lancet, published online, January 15, 2009, argues that there is a robust correlation between the extent of privatisation and the adult male mortality rate using country-level data for about 24 economies of Eastern Europe and the former Soviet Union. The "Editors' note" attached to the paper reads:

A useful drug alters the course of illness in around one in ten people who take it, as opposed to placebo. What about an intervention that saves millions of lives? Or an intervention that kills millions of people? The economic and social restructuring of eastern Europe, from 1989 onwards, can be regarded as one of the largest public-health experiments in history. This study compares the effects of rapid mass privatisation, such as that done in Russia, to those of more gradual restructuring. Rapid mass privatisation was associated with an increase of 12.8% in mortality rates among men. Possible mechanisms? Rapid social change has been linked to psychological stress, decreased access to and quality of medical care, poverty, unemployment, social inequality, social disorganisation, corruption, and an erosion of social capital. Harmful consumption of alcohol may have been a major cause of increased disease.

Well a few days back I received an email containing  a press release for a new paper that says the answer to the Lancet's question is "no".

KALAMAZOO, Mich.—A new study reconsiders and ultimately rejects the well-publicized claim in Lancet that privatization caused a drastic increase in premature deaths in ex-Soviet countries after the fall of communism. The new research, carried out by social scientists at the W.E. Upjohn Institute for Employment Research and the University of Wisconsin–Madison, shows that the reported correlation between adult male mortality and measures of enterprise privatization across former Soviet states is a statistical artifact of particular assumptions in the 2009 Lancet article.

The Lancet article's claim was widely reported around the world and seemed to confirm suspicions of privatization's negative social effects. The "pathway" by which privatization supposedly raised mortality was through job loss, leading to ill health and premature death. But the study by the American researchers finds no evidence that privatization resulted in rises of either mortality or unemployment.

The new analysis examines three simple checks that were made on the assumptions of the Lancet article: recomputing the measure of mass privatization, assuming a short lag for economic policies to affect mortality, and controlling for country-specific mortality trends. Any one of these changes greatly weakens the mortality-privatization correlation, and any two produce a correlation that is either zero or negative.

The American study also analyzes data on Russian regions, and the results again show there is no evidence that privatization increased mortality during the early 1990s. Finally, reanalysis of the relationship between privatization and unemployment in post-communist countries shows that there is little support for the Lancet article's proposed pathway by which privatization might have caused unnecessary deaths.

"Mass Privatisation and the Post-Communist Mortality Crisis: Is There Really a Relationship?" (by John S. Earle and Scott Gehlbach) can be accessed at the Upjohn Institute Web site at http://www.upjohn.org/mortality. A summary published in the Lancet is available at the same source.

In my original posting on this topic I said:

But there is a very obvious question to do with causality: How could changing ownership from state to private have raised mortality? The authors of the Lancet article put forward the theory that privatised firms cut employment and then refer to the extensive evidence on the negative impact of unemployment on health to link job loss to mortality. This idea in turn raises the question: Did privatisation systematically lead to substantial job loss? If not, then the causal mechanism of the paper breaks down and the article's results are open to question. Note that the Lancet article provides no evidence on this question.

Thus I'm interested to see Earle and Gehlbach saying,

But the study by the American researchers finds no evidence that privatization resulted in rises of either mortality or unemployment.

and

Finally, reanalysis of the relationship between privatization and unemployment in post-communist countries shows that there is little support for the Lancet article's proposed pathway by which privatization might have caused unnecessary deaths.

I have to say it does seem odd to see an economist and a a political scientist in the midst of a debate within the pages of a medical journal, but economics gets everywhere.