Driving through the Great Recession: Why does motor vehicle fatality decrease when the economy slows down?

The relationship between short-term macroeconomic growth and temporary mortality increases remains strongest for motor vehicle (MV) crashes. In this paper, I investigate the mechanisms that explain falling MV fatality rates during the recent Great Recession. Using U.S. state-level panel data from 2003 to 2013, I first estimate the relationship between unemployment and MV fatality rate and then decompose it into risk and exposure factors for different types of MV crashes. Results reveal a significant 2.9 percent decrease in MV fatality rate for each percentage point increase in unemployment rate. This relationship is almost entirely explained by changes in the risk of driving rather than exposure to the amount of driving and is particularly robust for crashes involving large commercial trucks, multiple vehicles, and speeding cars. These findings provide evidence suggesting traffic patterns directly related to economic activity lead to higher risk of MV fatality rates when the economy improves.