Academic journal article Contemporary Economic Policy

An Economic Interpretation of Suicide Cycles in Japan

Academic journal article Contemporary Economic Policy

An Economic Interpretation of Suicide Cycles in Japan

Article excerpt

I. INTRODUCTION

Since the early 1990s, Japan has experienced a tremendous increase in its suicide rate, especially among middle-aged men. At the same time, most other industrialized countries have seen suicide rates fall or increase only mildly (Figure 1). Although Japan has a culture that is more accepting of suicide than societies with Christian roots, the recent surge in the suicide rate has drawn the attention of policymakers and economists. The rate is unprecedented, and the suicide epidemic is probably related to the economic recession that the world's second biggest economy has suffered (Figure 2).

The male suicide rate in Japan in 2003 was 37.5 deaths per 100,000 persons--more than twice the U.S. rate of 17.8 deaths per 100,000 in 2002. Japan currently has the highest suicide rate among developed nations. The male rate is only lower than the suicide rates of the former Soviet Union and East European countries, which have endured a long and difficult economic transition, and Sri Lanka, which has suffered a long civil war. Japan's male suicide rate almost doubled from 1990 to 2003, a time when the country was in an economic recession. Japanese unemployment rates increased from 2.1% in 1990 to 5.3% in 2004. An unemployment rate of 5.3% may look quite healthy from European and U.S. perspectives, but it represents significant hardship in a country where the average unemployment rate for the last five decades has been 2.3%.

In standard economic models, suicide is considered a decision that a rational optimizing agent makes when his expected remaining lifetime utility falls below a certain threshold. (1) Suicide rates, therefore, should be higher when perceived lifetime incomes decrease. Models that follow the rational choice approach predict that the old-age cohorts will have higher suicide rates, all other things being equal, as the costs of maintaining health increase with age. (2)

Empirical research, however, does not always support the theory. Most of the work on suicide uses the unemployment rate as a measure of economic hardship and lifetime earnings because measuring an agent's perceived lifetime income is not easy in practice. Empirical tests involving panel data show a strong correlation between unemployment and suicide (see Gerdtham and Johannesson, 2003; Platt, 1984; Ruhm, 2000), but studies with aggregated time series data produce mixed results on at least two key points. First, the relationship between unemployment and suicide tends to be less sensitive in empirical models that incorporate more social variables, such as age, religion, and divorce rates (Yang, 1992, 1994). Second, aggregate time series research often finds gender differences in responding to economic hardship. Vigderhous and Fishman (1978), Yang (1992), Brainerd (2001), and others reported that female suicide does not respond at all (or at best shows little sensitivity) to unemployment compared to male suicide in the countries they examined.

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A monotonically increasing relationship between age and suicide has been documented since Durkheim (1897) for many countries. However, the relationships have disappeared as youth suicide rates have surged and overall suicide rates have declined in developed countries, including the United States and United Kingdom. In the United States, the suicide rates of young adults (aged 20-24 yr) are equal to those for prime-age adults (Cutler, Glaeser, and Norberg, 2000). In former Soviet Union countries, the suicide rates of prime-age adults rose dramatically in the 1990s. This distribution of suicide rates by age follows an observed recent pattern of the labor markets in former Soviet Union countries (Brainerd, 2001).

Revising the setup of Hamermesh and Soss (1974) and using filtered time series data, this article assesses how well an economic model can explain suicide cycles in Japan. An individual's economic and social conditions likely play an important role in suicidal behavior, although we acknowledge the influence of many noneconomic and nonsocioeconomic factors on the decision, such as physical and psychiatric illness. …

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