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The Effect of Growth and Inequality in Incomes on Health Inequality: Theory and Empirical Evidence from the European Panel

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Author Info

  • Tom Van Ourti

    ()
    (Erasmus Universiteit Rotterdam)

  • Eddy Van Doorslaer

    ()
    (Erasmus Universiteit Rotterdam)

  • Xander Koolman

    (Erasmus Universiteit Rotterdam)

Abstract

Europe aims at combining income growth with improvements in social cohesion as measured by income and health inequalities. 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 held in Europe in the nineties using panel data from the European Community Household Panel surveys. We use pooled interval regressions and inequality decompositions to demonstrate that (i) in all countries except Austria, the income elasticity of health is positive and increases with income, and (ii) that income growth was not pro-rich in most EU countries, resulting in little or no reductions in income inequality and modest increases in income-related health inequality in the majority of countries.Keywords:income inequality, health inequality, income elasticity of health, Europe.Classification-JEL: D30, D31, I10, I12.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 06-108/3.

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Date of creation: 12 Dec 2006
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Handle: RePEc:dgr:uvatin:20060108

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Keywords: income inequality; health inequality; income elasticity of health; Europe;

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References

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Cited by:
  1. David Madden, 2008. "Ordinal and Cardinal Measures of Health Inequality - An Empirical Comparison," Working Papers 200813, School Of Economics, University College Dublin.
  2. Kajal Lahiri & Zulkarnain Pulungan, 2009. "Health Inequality and Its Determinants in New York," Discussion Papers 09-04, University at Albany, SUNY, Department of Economics.
  3. Lahiri, Kajal & Pulungan, Zulkarnain, 2007. "Income-related health disparity and its determinants in New York state: racial/ethnic and geographical comparisons," MPRA Paper 21694, University Library of Munich, Germany.
  4. Wang, Kuan-Min, 2011. "Health care expenditure and economic growth: Quantile panel-type analysis," Economic Modelling, Elsevier, vol. 28(4), pages 1536-1549, July.

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