The Economy’s Effect on Tolerance for Coping

The economy apparently affects the diagnosis of illness by affecting community tolerance for coping. Society applies the label illness to physical and behavioral characteristics that reduce a person’s ability to perform day-to-day functions. The tolerance of a community for changes in performance, therefore, becomes an important determinant of whom it judges ill.

Sociologists and psychologists report that the economy affects tolerance for deviance from performance standards. Ecological psychologists have, for example, noted that understaffed organizations (i.e., those with a high ratio of roles, or functions, to participants) tolerate poor performance by members more than overstaffed organizations.

Maintaining an understaffed organization supposedly requires members to be tolerant of the shortcomings, real or imagined, of the relatively few persons available to perform needed functions. Persons in understaffed organizations whose coping strategies include physiological and behavioral adaptations that could be labeled as illness (e.g., alcohol abuse) will go undiagnosed because the label may, by rule, disqualify them from positions for which less deviant candidates cannot be found.

Overstaffed organizations, on the other hand, can choose from among many candidates for positions and can set relatively high standards for acceptable functioning. Persons adapting to stressful events may not function as well as other candidates. This performance deficit makes them the least likely to find positions. Accepting the label ill gives them a socially acceptable explanation for their lack of a position.

Economists have developed the theory of reservation wage to describe the individual choice to seek work or income transfers. The theory implies a continuum of physical and behavioral fitness among those who compete for jobs. Society decides where on this continuum it will make income transfers. If too high on the continuum, otherwise productive workers will seek transfers rather than compete for work. If too low, persons with illness will be forced to compete for jobs and become even sicker.

Wherever on the continuum political institutions draw the income transfer line, workers near it have the option of competing for jobs or seeking benefits. Economists refer to the wage at which someone no longer competes and applies for income transfers as his or her reservation wage.

Sociologists have applied the staffing and reservation wage concepts to the community at large. A contracting economy implies relatively many overstaffed organizations, while an expanding economy implies the opposite. The fraction of the labor continuum that can exceed its reservation wage by holding a job goes up with understaffing and down with overstaffing.

The number of persons seeking the label ill thereby changes with the ability of the economy to provide jobs with relatively high wages. The incidence of diagnosed illness moves inversely over time with the economy, not only because the labor market affects true incidence but also because it affects community tolerance for performance deficits.