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Fields:

Liquidity, Economic Activity, and Mortality

The Review of Economics and Statistics 2012 94(2), 400-418
We document a within-month mortality cycle where deaths decline before the first day of the month and spike after the first. This cycle is present across a wide variety of causes and demographic groups. A similar cycle exists for a range of economic activities, suggesting the mortality cycle may be due to short-term variation in levels of economic activity. We provide evidence that the within-month activity cycle is generated by liquidity. Our results suggest a causal pathway whereby liquidity problems reduce activity, which in turn reduces mortality. These relationships may help explain the procyclical nature of mortality.