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The Effect of Growth and Inequality in Incomes on Health Inequality: Theory and Empirical Evidence from the European Panel

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  • Tom Van Ourti

    (Erasmus Universiteit Rotterdam)

  • Eddy Van Doorslaer

    (Erasmus Universiteit Rotterdam)

  • Xander Koolman

    (Erasmus Universiteit Rotterdam)

Abstract

Europe aims at combining income growth with improvements in social cohesion as measured by income and health inequalities. We show that, theoretically, both aims can be reconciled only under very specific conditions concerning the type of growth and the income responsiveness of health. We investigate whether these conditions held in Europe in the nineties using panel data from the European Community Household Panel surveys. We use pooled interval regressions and inequality decompositions to demonstrate that (i) in all countries except Austria, the income elasticity of health is positive and increases with income, and (ii) that income growth was not pro-rich in most EU countries, resulting in little or no reductions in income inequality and modest increases in income-related health inequality in the majority of countries.Keywords:income inequality, health inequality, income elasticity of health, Europe.Classification-JEL: D30, D31, I10, I12.

Suggested Citation

  • Tom Van Ourti & Eddy Van Doorslaer & Xander Koolman, 2006. "The Effect of Growth and Inequality in Incomes on Health Inequality: Theory and Empirical Evidence from the European Panel," Tinbergen Institute Discussion Papers 06-108/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20060108
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    Cited by:

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    2. Karlsson, Martin & Nilsson, Therese & Lyttkens, Carl Hampus & Leeson, George, 2010. "Income inequality and health: Importance of a cross-country perspective," Social Science & Medicine, Elsevier, vol. 70(6), pages 875-885, March.
    3. Lahiri, Kajal & Pulungan, Zulkarnain, 2007. "Income-related health disparity and its determinants in New York state: racial/ethnic and geographical comparisons," MPRA Paper 21694, University Library of Munich, Germany.
    4. Madden, D, 2008. "Ordinal and Cardinal Measures of Health Inequality: An Empirical Comparison," Health, Econometrics and Data Group (HEDG) Working Papers 08/09, HEDG, c/o Department of Economics, University of York.
    5. Kajal Lahiri & Zulkarnain Pulungan, 2006. "Health Inequality and Its Determinants in New York," Discussion Papers 06-03, University at Albany, SUNY, Department of Economics.
    6. Kajal Lahiri & Zulkarnain Pulungan, 2021. "Racial/Ethnic Health Disparity in the U.S.: A Decomposition Analysis," Econometrics, MDPI, vol. 9(2), pages 1-14, May.
    7. David Madden, 2010. "Ordinal and cardinal measures of health inequality: an empirical comparison," Health Economics, John Wiley & Sons, Ltd., vol. 19(2), pages 243-250, February.

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    More about this item

    Keywords

    income inequality; health inequality; income elasticity of health; Europe;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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