Every Crisis Has a Silver Lining? Unravelling the Pro-Cyclical Pattern of Health Inequalities by Income

Tinbergen Institute Discussion Paper 2018-066/V

48 Pages Posted: 28 Aug 2018  

Max Coveney

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Pilar Garcia-Gomez

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Eddy van Doorslaer

Erasmus University Rotterdam (EUR) - Institute of Health Policy and Management

Tom Van Ourti

Erasmus University Rotterdam (EUR); Tinbergen Institute

Date Written: May 18, 2018

Abstract

It is well known that income and health are positively associated. Much less is known about the strength of this association in times of growth and recession. We develop a novel decomposition method that focuses on isolating the roles played by government transfers versus market transfers on changes in income-related health inequality (IRHI) in Europe. Using European Union Survey of Income and Living Conditions (EU-SILC) panel data for 7 EU countries from 2004 to 2013, we decompose the changes in IRHI while focusing on possible effects of the 2008 financial crisis. We find that such inequalities rise in good economic times and fall in bad economic times. This pattern can largely be explained by the relative stickiness of old age pension benefits compared to the market incomes of younger groups. Austerity measures are associated with a weakening of the IRHI reducing effect of government transfers.

Keywords: crisis, inequalities, health, income, decomposition

JEL Classification: D30, D63, I14, I15

Suggested Citation

Coveney, Max and Garcia Gomez, Pilar and van Doorslaer, Eddy and Van Ourti, Tom, Every Crisis Has a Silver Lining? Unravelling the Pro-Cyclical Pattern of Health Inequalities by Income (May 18, 2018). Tinbergen Institute Discussion Paper 2018-066/V. Available at SSRN: https://ssrn.com/abstract=3233484 or http://dx.doi.org/10.2139/ssrn.3233484

Max Coveney (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Pilar Garcia Gomez

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Eddy Van Doorslaer

Erasmus University Rotterdam (EUR) - Institute of Health Policy and Management

Netherlands

Tom Van Ourti

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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