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Inequality, Wealth and Health: Is Decreasing Income Inequality the Key to Create Healthier Societies?

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  • Ioana Pop

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  • Erik Ingen
  • Wim Oorschot
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    Abstract

    The idea that the level of stratification of societies contributes to the well-being of their members is gaining popularity. We contribute to this debate by investigating whether reducing inequalities in the income distribution of societies is a strategy for improving population health, especially appropriate for those countries that have reached the limits of economic growth. We test this idea on a dataset covering 140 countries and 2360 country-year observation between 1987 and 2008 and formulate hypotheses separately for countries with different level of economic development. We indeed found that countries with higher levels of income inequality also have lower levels of life expectancy (our measure of population health), and this result was consistent both in cross-sectional and longitudinal analyses. However, the relationship was found only among low- and middle-developed countries. In the group of high-developed countries, the relationship between income inequality and life expectancy was non-significant, which contradicts the literature. Expectations on the relationship between a country’s wealth and health were confirmed: economic growth does contribute to improving population health, but this effect is weaker in more economically developed countries. These results imply that a decrease in a country’s income inequality parallel with an increase in its wealth can help to improve health in economically lesser-developed countries, but not in high-developed countries. Copyright Springer Science+Business Media B.V. 2013

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    File URL: http://hdl.handle.net/10.1007/s11205-012-0125-6
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    Bibliographic Info

    Article provided by Springer in its journal Social Indicators Research.

    Volume (Year): 113 (2013)
    Issue (Month): 3 (September)
    Pages: 1025-1043

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    Handle: RePEc:spr:soinre:v:113:y:2013:i:3:p:1025-1043

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    Web page: http://www.springer.com/economics/journal/11135

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    Related research

    Keywords: Income inequality; Health; Wealth; Economic development;

    References

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    1. Pritchett, Lant & Summers, Lawrence H., 1993. "Wealthier is healthier," Policy Research Working Paper Series 1150, The World Bank.
    2. Deaton, A., 2001. "Health, Inequality, and Economic Development," Papers, Princeton, Woodrow Wilson School - Development Studies 200, Princeton, Woodrow Wilson School - Development Studies.
    3. Lynch, John, 2000. "Income inequality and health: expanding the debate," Social Science & Medicine, Elsevier, vol. 51(7), pages 1001-1005, October.
    4. Biggs, Brian & King, Lawrence & Basu, Sanjay & Stuckler, David, 2010. "Is wealthier always healthier? The impact of national income level, inequality, and poverty on public health in Latin America," Social Science & Medicine, Elsevier, vol. 71(2), pages 266-273, July.
    5. Mishra, Prachi & Newhouse, David, 2009. "Does health aid matter?," Journal of Health Economics, Elsevier, vol. 28(4), pages 855-872, July.
    6. Ranis, Gustav & Stewart, Frances & Ramirez, Alejandro, 2000. "Economic Growth and Human Development," World Development, Elsevier, vol. 28(2), pages 197-219, February.
    7. Babones, Salvatore J., 2008. "Income inequality and population health: Correlation and causality," Social Science & Medicine, Elsevier, vol. 66(7), pages 1614-1626, April.
    8. Frederick Solt, 2009. "Standardizing the World Income Inequality Database," Social Science Quarterly, Southwestern Social Science Association, vol. 90(2), pages 231-242.
    9. Coburn, David, 2004. "Beyond the income inequality hypothesis: class, neo-liberalism, and health inequalities," Social Science & Medicine, Elsevier, vol. 58(1), pages 41-56, January.
    10. Sudhir Anand & Martin Ravallion, 1993. "Human Development in Poor Countries: On the Role of Private Incomes and Public Services," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 133-150, Winter.
    11. Ram, Rati, 2006. "Further examination of the cross-country association between income inequality and population health," Social Science & Medicine, Elsevier, vol. 62(3), pages 779-791, February.
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