Income Inequality in the Great Recession did not Harm Subjective Health in Europe, 2003–2012

Abstract

A rich tradition of research has addressed income inequality and health, but the issue has achieved a fresh currency with the reversals of economic fortunes wrought by the Great Recession. This paper analyses the degree to which changing inequality induced by the Great Recession impacted Europeans’ subjective health (self-rated health and satisfaction with health). To address this question, we analyse the multilevel European Quality of Life Survey conducted mainly in 2003, 2008, and 2012 which provides representative samples from 24 European countries at all three time points, as well as national-level data on inequality (Gini coefficient) and appropriate national-level and individual-level controls. We find that, net of GDP, inequality has no statistically significant impact before, during or after the Great Recession. Turning to determinants, our variance-components multi-level models controlling for known individual-level predictors show that inequality remains insignificant at all time points, while individual family income is strongly related to subjective health GDP per capita has little effect except indirectly through income. We also assessed impacts specifically for vulnerable, at-risk groups. Including GDP per capita, Gini coefficient, and individual level controls, our model explains about one quarter of the variance in health status (R-squared >.23). All in all, our results support a rational choice, materialist hypothesis: that absolute prosperity of the individual matters to subjective health, but income inequality does not, in Europe in this period. This supports a policy emphasis on increasing levels of pay, and on poverty relief, rather than on reducing inequality.