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Infant mortality, relative income and public policy

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  • Tilman Tacke
  • Robert J. Waldmann

Abstract

Do health outcomes depend on relative income as well as on an individual's absolute level of income? We use infant mortality as a health status indicator and find a significant and positive link between infant mortality and income inequality using cross-national data for 93 countries. Holding constant the income of each of the three poorest quintiles of a country's population, we find that an increase in the income of the upper 20% of the income distribution is associated with higher, not the lower infant mortality. Our results are robust and not just caused by the concave relationship between income and health. The estimates imply a decrease in infant mortality by 1.5% for a one percentage point decrease in the income share of the richest quintile. The overall results are sensitive to public policy: public health care expenditure, educational outcomes, and access to basic sanitation and safe water can explain the inequality--health relationship. Thus, our findings support the hypothesis of public disinvestment in human capital in countries with high income inequality. However, we are not able to determine whether public policy is a confounder or mediator of the relationship between income distribution and health. Relative deprivation caused by the income distance between an individual and the individual's reference group is another possible explanation for a direct effect from income inequality to health.

Suggested Citation

  • Tilman Tacke & Robert J. Waldmann, 2013. "Infant mortality, relative income and public policy," Applied Economics, Taylor & Francis Journals, vol. 45(22), pages 3240-3254, August.
  • Handle: RePEc:taf:applec:v:45:y:2013:i:22:p:3240-3254
    DOI: 10.1080/00036846.2012.705429
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    File URL: http://hdl.handle.net/10.1080/00036846.2012.705429
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    References listed on IDEAS

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    1. Angus Deaton, 2001. "Relative Deprivation, Inequality, and Mortality," NBER Working Papers 8099, National Bureau of Economic Research, Inc.
    2. repec:pri:cheawb:deaton_relative_deprivation.pdf is not listed on IDEAS
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    Cited by:

    1. Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.
    2. Taylor Fahy Winkleman & Grace Bagwell Adams, 2017. "An empirical assessment of the relationship between Official Development Aid and child mortality, 2000–2015," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 62(2), pages 231-240, March.

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