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The effect of income growth and inequality on health inequality: Theory and empirical evidence from the European Panel

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  • Van Ourti, Tom
  • van Doorslaer, Eddy
  • Koolman, Xander

Abstract

Governments of EU countries have declared that they would like to couple income growth with reductions in social inequalities in income and health. We show that, theoretically, both aims can be reconciled only under very specific conditions concerning the type of growth and the income responsiveness of health. We investigate whether these conditions were met in Europe in the 1990s using panel data from the European Community Household Panel. We demonstrate that (i) in most countries, the income elasticity of health was positive and increases with income, and (ii) that income growth was not pro-rich in most EU countries, resulting in small or negligible reductions in income inequality. The combination of both findings explains the modest increases we observe in income-related health inequality in the majority of countries.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 28 (2009)
Issue (Month): 3 (May)
Pages: 525-539

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Handle: RePEc:eee:jhecon:v:28:y:2009:i:3:p:525-539

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Web page: http://www.elsevier.com/locate/inca/505560

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Keywords: Income inequality Health inequality Income elasticity of health Europe;

References

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Citations

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Cited by:
  1. Kemnitz, Alexander, 2010. "A simple model of health insurance competition," Dresden Discussion Paper Series in Economics 09/10, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
  2. Paul Allanson & Dennis Petrie, 2011. "On decomposing the causes of changes in income-related health inequality with longitudinal data," Dundee Discussion Papers in Economics 250, Economic Studies, University of Dundee.
  3. Wang, Kuan-Min, 2011. "Health care expenditure and economic growth: Quantile panel-type analysis," Economic Modelling, Elsevier, vol. 28(4), pages 1536-1549, July.
  4. Guillem López i Casasnovas & Marina Soley Bori, 2012. "The Economic Crisis and it Effects on the Social Determinants of Health," Hacienda Pública Española, IEF, vol. 201(2), pages 113-132, June.

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