Health Outcomes, Income and Income Inequality: Revisiting the Empirical Relationship

Abstract

In this paper we revisit the relationship between health outcomes, income, and income inequality by applying alternative panel methodologies to a dataset of high-income countries spanning the time period 1980–2017. In this direction, we adopt alternative methodological frameworks in order to provide a) meaningful results by taking into account standard errors that alleviate problems of cross-sectional (spatial) and temporal dependence, and b) insights into the underlying relationships at several points of the conditional distribution of the health outcomes dependent variables. The evidence strongly supports the significant role that income plays in determining health outcomes. The findings relating to income inequality and nonlinear terms are more fragmented in that their significance and sign-direction depend on the functional form and the respective quantiles of the distribution the relationships are evaluated.