Some microeconometric evidence on the relationship between health and income

Amélie Adeline,Eric Delattre

doi:10.1186/s13561-017-0163-5

Abstract

This paper examines the association between income, income inequalities and health inequalities in Europe. The contribution of this paper is to study different hypotheses linking self-perceived health status and income, allowing for the identification of different mechanisms in income-related health inequalities. Using data from the Survey of Health, Ageing and Retirement in Europe (15 countries), we take the advantage of the cross-sectional and longitudinal nature of this rich database to make robust results. The analyses (coefficient estimates as well as average marginal effects) strongly support two hypotheses by showing that (i) income has a positive and concave effect on health (Absolute Income Hypothesis); (ii) income inequalities in a country affect all members in a society (strong version of the Income Inequality Hypothesis). However, our study suggests that, when considering the position of the individual in the income distribution, as well as the interaction between income inequalities and these rankings, one cannot identify individuals the most affected by income inequalities (which should be the least well-off in a society according to the weak version of the Income Inequality Hypothesis). Finally, the robustness of this study is emphasized when implementing a generalized ordered probit to consider the subjective nature of the self-perceived health status to avoid the traps encountered in previous studies.

Highlights

The last few years have seen unprecedented attention to an attempt by policy makers, policy advisers and international institutions to reduce health inequalities
The strong version of the Income Inequality Hypothesis is specified as follows: hij = β0 + xiβ1 + x2i β2 + δIIj + Ziγ + ij which is an expansion of Eq (1) with the introduction of IIj as a measure of income inequalities in a society j; where hij represents the health status of individual i in a society j
In this study we underline the hypotheses through which health is associated to income and income inequalities

Summary

Introduction

The last few years have seen unprecedented attention to an attempt by policy makers, policy advisers and international institutions to reduce health inequalities. To do so, they usually focus on the access to healthcare, given that such policies allow to improve the health of lower income groups [28, 34]. It has been widely said that income and income inequalities are associated to health status; any public policy which influences income and/or income inequalities might influence health In this way, studying the relationship between income, income inequalities and health is interesting per se. The first one, called the Absolute Income Hypothesis, was initially introduced by Preston [29] and states that there is a positive and concave

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Conclusion