Income Distribution, Infant Mortality, and Health Care Expenditure

Abstract

Do health outcomes depend on relative income as well as on an individual's absolute level of income? We use infant mortality as a health status indicator and find a significant and positive link between infant mortality and income inequality using cross-national data for 98 countries. Holding constant the income of each of the three poorest quintiles of a country's population, we find that an increase in the income of the upper 20% of the income distribution is associated with higher, not lower infant mortality. Our results imply that a one percentage point decrease in the income share of the richest quintile correlates with a decrease in infant mortality by nearly two percent. The surprisingly positive coefficient becomes insignificant when we control for public health care expenditure. Low public expenditure on health care seems to translate into limited access to health care for the poor.