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Income inequality and health: New evidence from panel data

Author

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  • Herzer, Dierk
  • Nunnenkamp, Peter
Abstract
This paper argues that previous cross-country (panel) studies on the relationship between income inequality and health suffer from significant biases due to (i) omitted country-specific factors, (ii) endogeneity, and (iii) cross-country heterogeneity in the impact of inequality on health. Using panel cointegration techniques that are robust to omitted variables, endogenous regressors, and slope heterogeneity, we find that income inequality has, on average, a small, but robust and statistically significant positive impact on population health. Also, there is some evidence that inequality is endogenous in the sense that poor health leads to increased income inequality. Finally, we find that there are large cross-country differences in the effect of income inequality on health (in about 35 percent of the cases, the effect is negative).

Suggested Citation

  • Herzer, Dierk & Nunnenkamp, Peter, 2011. "Income inequality and health: New evidence from panel data," Kiel Working Papers 1736, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1736
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pulok, Mohammad Habibullah, 2012. "Revisiting Health and Income Inequality Relationship:Evidence from Developing Countries," MPRA Paper 39766, University Library of Munich, Germany.
    2. Dierk Herzer, 2017. "The Long-run Relationship Between Trade and Population Health: Evidence from Five Decades," The World Economy, Wiley Blackwell, vol. 40(2), pages 462-487, February.
    3. Nisar Ahmad & Shahbaz Khan, 2021. "Impact of Income Inequality on Health Status in South Asian Countries: A Panel Data Analysis," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 205-219.
    4. Robert J. Sonora, 2022. "A panel analysis of income inequality and energy use," Contemporary Economic Policy, Western Economic Association International, vol. 40(1), pages 83-97, January.

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    More about this item

    Keywords

    health; inequality; panel cointegration;
    All these keywords.

    JEL classification:

    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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