Income inequality and health status: role of institutions quality

This paper investigates the relationships between health indicators, institutional variables and income inequality. In the economic literature, the impact of income distribution on health status is largely studied. Theoretically, all the mechanisms developed in the literature highlight a negative impact of income inequality on health status. However, empirical studies find different results and the conclusions are far from a consensus. In this article, we partly propose an explanation to these discrepancies on the effect of income distribution on health by introducing institutions quality in the debate. More precisely, we assess whether the effect of income inequality on population's health is conditional to institutions quality. Our analysis shows that income inequality affects negatively population health and this negative effect is mitigated by good institutions. Another interesting result is that income inequality affects higher health status in developing countries as compare to others.