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Income Inequality and Health: Lessons from a Residential Assignment Program

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Author Info

  • Hans Grönqvist

    ()
    (SOFI, Stockholm University)

  • Per Johansson

    ()
    (IFAU; Uppsala University; IZA)

  • Susan Niknami

    ()
    (SOFI, Stockholm University)

Abstract

This paper investigates how income inequality affects health. Although a large literature has shown that inhabitants in areas with greater income inequality suffer from worse health, past studies are severely plagued by inadequate data, non-random residential sorting and reverse causality. We address these problems using longitudinal population hospitalization data coupled with a settlement policy where Swedish authorities distributed newly arrived refugee immigrants to their initial area of residence. The policy was implemented in a way that provides a source of plausibly random variation in initial location. Our empirical analysis reveals no statistically significant effect of income inequality on the probability of being hospitalized. This finding holds also when investigating subgroups more vulnerable to negative health influences and when studying different types of diseases. There is however some indications of a detrimental effect on older persons’ health; but the magnitude of the effect is small. Our estimates are precise enough to rule out large effects of income inequality on health.

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Bibliographic Info

Paper provided by Norface Research Programme on Migration, Department of Economics, University College London in its series Norface Discussion Paper Series with number 2011017.

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Date of creation: Oct 2011
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Handle: RePEc:nor:wpaper:2011017

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Keywords: Income inequality; Immigration; Quasi-experiment;

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  1. Andrew Leigh & Christopher Jencks, 2006. "Inequality and Mortality: Long-Run Evidence from a Panel of Countries," CEPR Discussion Papers 533, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  2. Aaberge, Rolf, et al, 2002. "Income Inequality and Income Mobility in the Scandinavian Countries Compared to the United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(4), pages 443-69, December.
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