Discussion Paper

No. 2014-45 | November 12, 2014
Income Inequality and Health: Evidence from Developed and Developing Countries

Abstract

The authors assess the effect of income inequality on life expectancy by performing separate estimations for developed and developing countries. Their empirical analysis challenges the widely held view that inequality matters more for health in richer countries than for health in poorer countries. Employing panel cointegration and conventional panel regressions, they find that income inequality increases life expectancy in developed countries. By contrast, the effect on life expectancy is significantly negative in developing countries. While the quantitative effects are small, the striking contrast between the two country groups proves to be robust to modifications in measurement, specification and methodological choices.

JEL Classification:

I14, C23

Assessment

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Links

Cite As

Dierk Herzer and Peter Nunnenkamp (2014). Income Inequality and Health: Evidence from Developed and Developing Countries. Economics Discussion Papers, No 2014-45, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2014-45


Comments and Questions


Anonymous - Referee Report 1
November 24, 2014 - 16:39

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Anonymous - Reply to Referee 1
November 26, 2014 - 12:45

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Michael Grimm - Invited Reader Comment
December 01, 2014 - 12:06

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Peter Nunnenkamp - Reply to Michael Grimm
December 02, 2014 - 09:59

We would like to thank you for your encouraging comment on our paper. When revising the paper we will follow your suggestion to interpret our findings more carefully, considering the rather small quantitative impact of changes in income inequality on life expectancy. To check for conditions under which the impact ...[more]

... switches from negative to positive, we could re-estimate equation (2) for varying sub-samples of ‘middle-income’ countries. We are particularly grateful that you alerted us to the most recent working paper by Stephen Jenkins. We will refer to his critical assessment of the databases on income inequality in the revised version of Section 3 “Empirical models and data.” In the concluding section, we may explicitly mention the exploration of exact transmission channels as an issue for further research.


Hermann Sautter - Invited Reader Comment
December 17, 2014 - 10:02

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Peter Nunnenkamp - Reply to Professor Sautter
December 23, 2014 - 11:53

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