, Volume 113, Issue 3, pp 1025-1043
Date: 22 Jul 2012

Inequality, Wealth and Health: Is Decreasing Income Inequality the Key to Create Healthier Societies?

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Abstract

The idea that the level of stratification of societies contributes to the well-being of their members is gaining popularity. We contribute to this debate by investigating whether reducing inequalities in the income distribution of societies is a strategy for improving population health, especially appropriate for those countries that have reached the limits of economic growth. We test this idea on a dataset covering 140 countries and 2360 country-year observation between 1987 and 2008 and formulate hypotheses separately for countries with different level of economic development. We indeed found that countries with higher levels of income inequality also have lower levels of life expectancy (our measure of population health), and this result was consistent both in cross-sectional and longitudinal analyses. However, the relationship was found only among low- and middle-developed countries. In the group of high-developed countries, the relationship between income inequality and life expectancy was non-significant, which contradicts the literature. Expectations on the relationship between a country’s wealth and health were confirmed: economic growth does contribute to improving population health, but this effect is weaker in more economically developed countries. These results imply that a decrease in a country’s income inequality parallel with an increase in its wealth can help to improve health in economically lesser-developed countries, but not in high-developed countries.