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Income Inequality and Health: Lessons from a Residential Assignment Program

Author

Listed:
  • 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.

Suggested Citation

  • Hans Grönqvist & Per Johansson & Susan Niknami, 2011. "Income Inequality and Health: Lessons from a Residential Assignment Program," Norface Discussion Paper Series 2011017, Norface Research Programme on Migration, Department of Economics, University College London.
    • Handle: RePEc:nor:wpaper:2011017
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    References listed on IDEAS

    as
    1. Leigh, Andrew & Jencks, Christopher, 2007. "Inequality and mortality: Long-run evidence from a panel of countries," Journal of Health Economics, Elsevier, vol. 26(1), pages 1-24, January.
    2. Olof Åslund & Per-Anders Edin & Peter Fredriksson & Hans Grönqvist, 2011. "Peers, Neighborhoods, and Immigrant Student Achievement: Evidence from a Placement Policy," American Economic Journal: Applied Economics, American Economic Association, vol. 3(2), pages 67-95, April.
    3. Rolf Aaberge & Anders Björklund & Markus Jäntti & Mårten Palme & Peder J. Pedersen & Nina Smith & Tom Wennemo, 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 443-469, December.
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    Cited by:

    1. Nekby, Lena & Pettersson-Lidbom, Per, 2012. "Revisiting the Relationship between Ethnic Diversity and Preferences for Redistribution," Research Papers in Economics 2012:9, Stockholm University, Department of Economics.

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    More about this item

    Keywords

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    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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