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

Tinbergen Institute Discussion Paper No. 06-108/3

53 Pages Posted: 3 Jan 2007

See all articles by Tom Van Ourti

Tom Van Ourti

Erasmus University Rotterdam (EUR); Tinbergen Institute

Eddy van Doorslaer

Erasmus School of Economics

X. Koolman

Erasmus Medical Centre - Department of Health Policy and Management

Date Written: December 2006

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

JEL Classification: D30, D31, I10, I12

Suggested Citation

Van Ourti, Tom and van Doorslaer, Eddy and Koolman, X., The Effect of Growth and Inequality in Incomes on Health Inequality: Theory and Empirical Evidence from the European Panel (December 2006). Tinbergen Institute Discussion Paper No. 06-108/3, Available at SSRN: https://ssrn.com/abstract=954708 or http://dx.doi.org/10.2139/ssrn.954708

Tom Van Ourti (Contact Author)

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

Eddy Van Doorslaer

Erasmus School of Economics ( email )

Netherlands

X. Koolman

Erasmus Medical Centre - Department of Health Policy and Management ( email )

Doctor Molewaterplein 40
Rotterdam, South Holland 3015 GD
Netherlands

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