Abstract
The growth in US income inequality since the late 1970s has directed much public policy attention to the macroeconomic and political factors contributing to such growth. In this review, I focus on the microeconomic implications of income inequality for household wellbeing, specifically, on whether income inequality per se has an impact on the health of household members. In doing so I review work that has posited the social and biological pathways through which inequality may affect health, and the empirical approaches and challenges to identifying such causality. I find that despite both theoretical and conceptual arguments that income inequality may affect the health of family members through the family’s relative position in the income distribution, the weight of the empirical evidence does not support such a causal relationship. I conclude with a discussion differentiating the importance of income support for those in the lower percentiles of the income distribution, and efforts to improve the relative economic status of others.
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Notes
As noted, the concave income – health relationship displayed by Fig. 1 reveals diminishing increments to health as income increases. As food is an important input to family health, it is instructive to note that the Engel curve for food – the relationship between share of income spent on food and family income – also displays a concave relationship as income increases, with the share of income spent of food diminishing. This relationship is recognized as one of the most robust in economics (Chai & Moneta, 2010). I thank Shoshana Grossbard for this point.
Among such provisions are the temporary Economic Impact Payment checks of $1400 per family member for eligible families. The fully refundable Child Tax Credit is available to children in families with low or no earnings, raising the maximum credit from $2,000 to $3,000 per child and $3,600 for children under age six, and the credit is extended to 17-year-olds. The increase in the maximum amount will begin to phase out for heads of households making $112,500 and married couples making $150,000. The Act increase the Earned Income Tax Credit for low-wage, childless working adults, raising the maximum from about $540 to about $1,500. The Act will also increase the income cap to qualify from roughly $16000 to $21000, and expand the age range of those eligible to include younger adults aged 19-24 who are not full-time students and those 65 and over.
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Monheit, A.C. Perspectives article: income inequality, health, and household welfare. Rev Econ Household 20, 37–55 (2022). https://doi.org/10.1007/s11150-021-09589-0
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DOI: https://doi.org/10.1007/s11150-021-09589-0