Income Inequality and Health: Importance of a Cross-Country Perspective

Social Science and Medicine, Vol. 70, 2010

Posted: 6 Dec 2013

See all articles by Martin Karlsson

Martin Karlsson

University of Duisburg-Essen

Therese Nilsson

Research Institute of Industrial Economics (IFN); Lund University - Department of Economics

Carl Hampus Lyttkens

Independent

George W. Leeson

Independent

Date Written: 2010

Abstract

This paper uses a unique dataset containing information collected in 2006 on individuals aged 40-79 in 21 countries throughout the world to examine whether individual income, relative income in a reference group, and income inequality are related to health status across middle/low and high-income countries. The dependent variable is self-assessed health (SAH), and as a robustness check, activities of daily living (ADL) are considered. The focus is particularly on assumptions regarding an individual’s reference group and on how the estimated relationships depend on the level of economic development. Correcting for national differences in health reporting behavior, individual absolute income is found to be positively related to individual health. Furthermore, in the high-income sample, there is strong evidence that average income within a peer-age group is negatively related to health, thus supporting the relative income hypothesis. In middle/low-income countries, it is instead average regional income that is negatively associated with health. Finally, there is evidence of a negative relationship between income inequality and individual health in high-income countries. Overall, the results suggest that there might be important differences in these relationships between high-income and middle/low-income countries.

Keywords: Health, Economic inequalities, Income distribution, Reference groups, Cross-country

Suggested Citation

Karlsson, Martin and Nilsson, Therese and Lyttkens, Carl Hampus and Leeson, George W., Income Inequality and Health: Importance of a Cross-Country Perspective (2010). Social Science and Medicine, Vol. 70, 2010, Available at SSRN: https://ssrn.com/abstract=2363795

Martin Karlsson (Contact Author)

University of Duisburg-Essen ( email )

Therese Nilsson

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Lund University - Department of Economics ( email )

P.O. Box 7082
S-220 07 Lund
Sweden
+46 46 222 46 43 (Phone)

Carl Hampus Lyttkens

Independent ( email )

George W. Leeson

Independent

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