Unemployment and households' food consumption: A cross-country panel data analysis across OECD countries

Abstract

Using a panel of all 38 OECD countries for the time period 1980–2020, we estimate elasticities between aggregate unemployment and households' average food consumption. For food consumption measured in calorie intake, we find a small but statistically and economically significant negative elasticity of about 0.02 with unemployment. This elasticity is about 0.03 for food spending measured in protein intake which suggests that unemployment most likely leads to decreases in the quality of food primarily, on average. These findings are robust to a wide variety of consumption definitions, functional forms, types of wealth and income fluctuations, countries considered, and institutions considered. Our results suggest that unemployment insurance benefits and households' savings both matter for the size of the elasticity, thereby operating as automatic stabilizers.