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Inequalities in Income and Inequalities in Health

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  • Angus Deaton

Abstract

What is inequality in health? Are economists' standard tools for measuring income inequality relevant or useful for measuring it? Does income protect health and does income inequality endanger it? I discuss two different concepts of health inequality and relate each of them to the literature on the inequality in income. I propose a model in which each individual's health is related to his or her status within a reference group as measured by income relative to the group mean. Income inequality, whether within groups or between them, has no effect on average health. Even so, the slope of the relationship between health and income, the gradient,' depends on the ratio of between- to within-group inequality. The model is extended to allow income inequality to play a direct role in determining health status. Empirical evidence on cross-country income inequality and life-expectancy within the OECD, and on time series for the U.S., Britain, and Japan, provides little support for the idea that inequality is a health hazard at the national level. Birth cohorts in the US between 1981 and 1993 show no relationship between mortality and income inequality. However, there is a well-defined health gradient in these data, and its slope increases with cohort income inequality.

Suggested Citation

  • Angus Deaton, 1999. "Inequalities in Income and Inequalities in Health," NBER Working Papers 7141, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7141
    Note: AG HC
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    Cited by:

    1. David Cantarero & Marta Pascual & Jose Maria Sarabia, 2004. "Can income inequality contribute to understand inequalities in health? An empirical approach based on the European Community Household Panel," ERSA conference papers ersa04p230, European Regional Science Association.
    2. Daniel G. Sullivan & Till von Wachter, 2006. "Mortality, mass-layoffs, and career outcomes: an analysis using administrative data," Working Paper Series WP-06-21, Federal Reserve Bank of Chicago.
    3. David E. Sahn, 2012. "Health Inequality across Populations of Individuals," African Development Review, African Development Bank, vol. 24(4), pages 316-326, December.
    4. Orazio Attanasio & Carl Emmerson, 2001. "Differential mortality in the UK," IFS Working Papers W01/16, Institute for Fiscal Studies.
    5. Carlos Bethencourt & Vincenzo Galasso, "undated". "On the Political Complementarity between Health Care and Social Security," Working Papers 184, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    6. Janet Currie & Mark Stabile, 2003. "Socioeconomic Status and Child Health: Why Is the Relationship Stronger for Older Children?," American Economic Review, American Economic Association, vol. 93(5), pages 1813-1823, December.
    7. Lindley & Lorgelly, 2005. "The relative income hypothesis: does it exist over time? Evidence from the BHPS," Labor and Demography 0510007, EconWPA.
    8. Jennifer M. Mellor & Jeffrey Milyo, 1999. "Re-Examining the Evidence of an Ecological Association between Income Inequality and Health," Discussion Papers Series, Department of Economics, Tufts University 9922, Department of Economics, Tufts University.
    9. Jennifer Montez & Robert Hummer & Mark Hayward, 2012. "Educational Attainment and Adult Mortality in the United States: A Systematic Analysis of Functional Form," Demography, Springer;Population Association of America (PAA), vol. 49(1), pages 315-336, February.
    10. Oded Galor & David Mayer-Foulkes, 2004. "Food for Thought: Basic Needs and Persistent Educational Inequality," GE, Growth, Math methods 0410002, EconWPA.
    11. Wang, Limin, 2002. "Health outcomes in poor countries and policy options : empirical findings from demographic and health surveys," Policy Research Working Paper Series 2831, The World Bank.
    12. F Le R Booysen, 2002. "Poverty and Health in Southern Africa:Evidence from the Demographic and Health Survey (DHS)," South African Journal of Economics, Economic Society of South Africa, vol. 70(2), pages 181-192, March.
    13. Kenya Valeria M. S. Noronha & M™nica Viegas Andrade, 2002. "Desigualdades sociais em saúde: evidências empíricas sobre o caso brasileiro," Textos para Discussão Cedeplar-UFMG td171, Cedeplar, Universidade Federal de Minas Gerais.
    14. David Cantarero & Marta Pascual & Jose Maria Sarabia, 2005. "Effects of income inequality on population health: new evidence from the european community household panel," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 87-91.
    15. Nakamura, Sayaka, 2014. "Parental income and child health in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 32(C), pages 42-55.
    16. Tamara Tonoyan, 2005. "Poverty, Inequality and Health: А case study of Armenia," Departmental Discussion Papers 124, University of Goettingen, Department of Economics.
    17. Lhila, Aparna & Simon, Kosali I., 2010. "Relative deprivation and child health in the USA," Social Science & Medicine, Elsevier, vol. 71(4), pages 777-785, August.
    18. Pradhan, Menno & Sahn, David E. & Younger, Stephen D., 2003. "Decomposing world health inequality," Journal of Health Economics, Elsevier, vol. 22(2), pages 271-293, March.
    19. David E. Sahn & Stephen D. Younger, 2009. "Measuring intra‐household health inequality: explorations using the body mass index," Health Economics, John Wiley & Sons, Ltd., vol. 18(S1), pages 13-36, April.
    20. Heather L. Bednarek & Rowena A. Pecchenino & Sally C. Stearns, 2008. "Do Your Neighbors Influence Your Health?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(2), pages 301-315, April.
    21. Rickardsson, Jonna & Mellander, Charlotta, 2017. "Absolute vs Relative Income and Life Satisfaction," Working Paper Series in Economics and Institutions of Innovation 451, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    22. Delfin Go & Denis Nikitin & Xiongjian Wang & Heng-fu Zou, 2007. "Poverty and Inequality in Sub-Saharan Africa: Literature Survey and Empirical Assessment," Annals of Economics and Finance, Society for AEF, vol. 8(2), pages 251-304, November.
    23. Janet Currie & Mark Stabile, 2002. "Socioeconomic Status and Health: Why is the Relationship Stronger for Older Children?," NBER Working Papers 9098, National Bureau of Economic Research, Inc.
    24. Marislei Nishijima & Alexandre Sartoris, "undated". "Determinants of Health in the City of Sao Paulo: A Spatial Approach," EcoMod2007 23900060, EcoMod.
    25. Martin, Marie-Claude, 2008. "Individual and Collective Resources and Health in Morocco," WIDER Working Paper Series 021, World Institute for Development Economic Research (UNU-WIDER).

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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

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