Abstract
This study examined the mediation effect of gross domestic product (GDP) on the relationship between life expectancy and income inequality based on data from 23 Organisation for Economic Co-operation and Development (OECD) countries for 2004 through 2014. To form a theoretical framework, Preston curve and Kuznets curve were employed. The study set up a mediation model with life expectancy as an outcome variable, GDP as a mediator variable, and three variables characterising income inequality as predictor variables: Gini index, income share held by highest 20%, and poverty headcount ratio at US$1.90 a day. The study found that GDP clearly mediates the effects of the predictor variables on life expectancy, although the magnitudes of the effects vary. This study takes an important initial step in exploring the mediation effect of GDP on the relationship between life expectancy and income inequality.
Highlights
Economic growth is recognised to have a positive influence on mortality rates (Acemoglu & Johnson, 2007; Banister & Zhang, 2005; Preston, 1975, 2007; Schnabel & Eilers, 2009). Preston (1975, 2007) found a positive relationship between national income per head and life expectancy, as illustrated by Preston curve
The equation is as follows: 1 − (c'/c). When it comes to the relationship between life expectancy and each variable, the proportions mediated by gross domestic product (GDP) are as follows: Gini index is 53% (0.5324); income share held by highest 20% is 53% (0.5340); and poverty headcount ratio at $1.90 a day is 97% (0.9678), respectively
To examine mediation of GDP on the relationship between life expectancy and income inequality, this study set up mediation model with GDP as a mediator variable, life expectancy as an outcome variable, and three variables specified for income inequality as predictor variables
Summary
Economic growth is recognised to have a positive influence on mortality rates (Acemoglu & Johnson, 2007; Banister & Zhang, 2005; Preston, 1975, 2007; Schnabel & Eilers, 2009). Preston (1975, 2007) found a positive relationship between national income per head and life expectancy, as illustrated by Preston curve. The Preston curve shows that economic growth has a significant effect on life expectancy (Banister & Zhang, 2005; Preston, 1975, 2007; Schnabel & Eilers, 2009). It might be deduced that income inequality has a relationship with life expectancy via a mediator of gross domestic product (GDP).
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