Income Inequality, Health and Development - In Search of a Pattern

Research on Economic Inequality, Volume 21: Health and Inequality, Forthcoming

Posted: 6 Dec 2013

See all articles by Therese Nilsson

Therese Nilsson

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

Andreas Bergh

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

Date Written: December 4, 2013

Abstract

There is an on-going debate as to whether health is negatively affected by economic inequality. Still, we have limited knowledge of the mechanisms relating inequality to individual health and very little evidence comes from less-developed economies. We use individual and multi-level data from Zambia on child nutritional health to test three hypotheses consistent with a negative correlation between income inequality and population health: the absolute income hypothesis (AIH), the relative income hypothesis (RIH) and the income inequality hypothesis (IIH). The results confirm that absolute income positively affects health. For the RIH we find sensitivity to the reference group used. Most interestingly, we find higher income inequality to robustly associate with better child health. The same pattern appears in a cross country regression. To explain the conflicting results in the literature we suggest examining potential mediators such as generosity, food sharing, trust and purchasing power.

Keywords: Inequality, health, development

JEL Classification: D31, I10, I12, O10

Suggested Citation

Nilsson, Therese and Bergh, Andreas, Income Inequality, Health and Development - In Search of a Pattern (December 4, 2013). Research on Economic Inequality, Volume 21: Health and Inequality, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2363797

Therese Nilsson (Contact Author)

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)

Andreas Bergh

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34 2nd floor
Stockholm, SE-102 15
Sweden
0707790734 (Phone)

HOME PAGE: http://www.ifn.se/web/AndreasB

Lund University - Department of Economics ( email )

P.O. Box 7082
S-220 07
Lund
Sweden

HOME PAGE: http://www.nek.lu.se/

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