Discussion Paper

No. 2017-12 | March 22, 2017
Does rising income inequality affect mortality rates in advanced economies?

Abstract

What effect does rising income inequality have on mortality rates in developed countries? In particular, does the rise of the super-wealthy or the top 0.01% of the population effect overall health of the population? This paper focuses on the effect of rising income inequality on mortality rates of men and women in a subset of OECD countries over six decades from 1950–2008.  The authors used adult mortality as the outcome measure and the inverted Pareto-Lorenz coefficient as the preferred measure of income inequality and obtained the latest and precise data on the income inequality measure. They used a panel co-integration econometric framework to address some of the challenges posed by more conventional methods. The findings show that for industrialized countries with co-integrated series, income inequality appears to have a long-run significant negative effect on mortality risk for both men and women, that is, an increase in income inequality does not appear to lower annualized adult mortality rates.

JEL Classification:

I1, C1

Assessment

  • Downloads: 283

Links

Cite As

Mayvis Rebeira, Paul Grootendorst, Peter C. Coyte, and Victor Aguirregabiria (2017). Does rising income inequality affect mortality rates in advanced economies? Economics Discussion Papers, No 2017-12, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2017-12


Comments and Questions


Omolola Olarinde - Literature review
March 23, 2017 - 11:06

I would need clarification on such varied results on the relationship income inequality and health outcomes presented in the literature review. Perhaps a review structured around explaining the differences could help.


Mayvis Rebeira, Paul Grootendorst, Peter C. Coyte, and Victor Aguirregabiria - Reply
March 29, 2017 - 12:53

In the literature abstract, a few hundred papers cutting across economics and other fields were first extracted and a summary of the most relevant economics literature was summarized in the article. There is intention to develop a full systematic literature review in a subsequent follow-up paper to understand fully the ...[more]

... reasons for these differences.
From the current review for this paper, the main differences explaining the varied results can be summarized by the following reasons: First, several of the earlier studies that showed the positive effect of income inequality over time used cross-sectional survey data that did not enable the observation of trends over time in both outcomes and income inequality. The use of longitudinal panel data and cross-sectional data in different studies could have accounted for these differing results. Second, accurate income inequality data over long time periods of time for many countries is difficult to obtain and varied results could be attributed to the source of data and type of income inequality measure used (e.g. Gini coefficient). This particular study uses income inequality data gathered from tax records that makes the data source one of the most accurate measure for these countries. Third, the lack of a theoretical framework could make it challenging to specify the empirical problem. As Deaton noted, without a cohesive theory, there is no guide to identify evidence to examine or if propositions are refutable. As a result, studies have looked into various evidence and have explained the mechanisms of action through varied possible routes that span from diverse fields of research. Finally, some of the studies that do use panel data have encountered various econometric challenges including omitted variable bias and endogeneity. These empirical limitations could have caused results that differ between studies. As the paper may not have clarified this explanation, we are able to add a section to highlight these points.


Anonymous - Referee report 1
April 18, 2017 - 10:44

see attached file


Anonymous - Response to Reviewer
April 23, 2017 - 22:41

Attached is the response to the reviewer's comments.


Mayvis Rebeira - Revised Manuscript
April 23, 2017 - 22:42

The updated manuscript is attached here.


Anonymous - Referee report 2
April 25, 2017 - 09:12

see attached file


Anonymous - Response to Reviewer
April 30, 2017 - 22:32

Please see response to the reviewer's comments.


Mayvis Rebeira - Revised Manuscript-2
April 30, 2017 - 22:33

Attached is the updated manuscript.


Anonymous - Co-editor´s decision
May 03, 2017 - 15:37

I read the referees´comments and the responses by the authors. The referees raised many important and serious issues that had mainly to do with their impression that the paper was hastily put together with a lot of omissions of ımoportant discussion and details. However, I think that the authors did ...[more]

... a good job revising the paper and taking into account the points raised in the reports. Even though the original assessment of the referees was to reject the paper, the revised version is sufficiently improved to be publishable. As such I recommend publication.