Do Education and Income Really Explain Inequalities in Health? Applying a Twin Design

24 Pages Posted: 19 Jan 2016

See all articles by Ulf-G Gerdtham

Ulf-G Gerdtham

Lund University

Petter Lundborg

Tinbergen Institute; Lund University School of Economics and Management; IZA Institute of Labor Economics

Carl Hampus Lyttkens

Independent

P. Nystedt

Jonkoping University

Date Written: January 2016

Abstract

We apply a twin design to examine the relationship between health and education and income. The estimated associations between health and education and income, controlling for unobserved endowments, at the twin‐pair level, are lower than estimates obtained via ordinary least‐squares (OLS) on the same sample. Thus, OLS‐based effects of education and income are biased, exaggerating the contribution of education and income to health inequality. The main part of health inequality is explained by within‐twin‐pair fixed effects, incorporating family background and genetic inheritance. It appears that education and income policies have less to offer for reducing health inequality than is usually assumed.

Keywords: Education, health inequality, income, twins

JEL Classification: I10, I12, I14

Suggested Citation

Gerdtham, Ulf and Lundborg, Petter and Lundborg, Petter and Lyttkens, Carl Hampus and Nystedt, P., Do Education and Income Really Explain Inequalities in Health? Applying a Twin Design (January 2016). The Scandinavian Journal of Economics, Vol. 118, Issue 1, pp. 25-48, 2016, Available at SSRN: https://ssrn.com/abstract=2717200 or http://dx.doi.org/10.1111/sjoe.12130

Petter Lundborg

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Lund University School of Economics and Management ( email )

P.O Box 7080
Lund
Sweden

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Carl Hampus Lyttkens

Independent ( email )

P. Nystedt

Jonkoping University ( email )

SE-551 11 Jonkoping
Sweden

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