Association between income distribution and health changes with level of economic development
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The effect of women's labor force participation on income distribution in the United States is reviewed. "Because the wives of highly paid men participate less in the labor force, the earnings of working wives make the distribution of pretax, money income more equal for families than it might otherwise be. Although there is considerable speculation that future developments in women's labor force participation may foster greater inequality, the empirical results are mixed." The factors that need to be considered in future research are outlined.
This paper examines the determinants of real per capita health expenditures in order to assess the impact of age distribution, income and time using American state-level data for the period 1980-1998 and Canadian province-level data for the period 1975-2000. Ageing population distributions and income explain a relatively small portion of health expenditures when the impact of time effects, which is a partial proxy for technological change, is controlled for. However, the impact of age is of more concern given that cost increases are concentrated in the last few years of life and there may be cohort effects as the "Baby-Boom" generation ages. There is an urgent need to better understand the exact mechanisms driving health expenditure increases given that time accounts for approximately two-thirds of health expenditure increases and that its effect is non-linear.
Using data from the New Beneficiary Survey, this article examines income received by the newly retired from assets, employer-provided pensions, and social security. Today's retirees commonly possess pension or asset income to supplement social security. The proportions with asset income were 83 percent for married men and their wives and 69 percent for the unmarried. The proportions with pension income were 56 percent for the married couples and 42 percent for the unmarried. The article finds that up through the middle of the income distribution, social security remains the main income component. In addition to these traditional income sources of the retired, the data also highlight the important role of earnings among many of the new beneficiaries--44 percent of the married couples and 27 percent of the unmarried had current earnings.
The study measures the economic vulnerability of disabled persons whose impaired health interfered with their earning ability. This population segment, about one sixth of the total population, represents the extreme both in terms of sensitivity to health problems and losses in economic power. The major findings are given in a nutshell. 1) Inadequate income did not bar the disabled individuals from contact with the medical care system except in the case of the weakest among the weak, the aging women without husbands. This finding suggests that the restraining effect of income can become strong enough to overcome the concern with ill-health, although the inhibiting effect of economic constraints weakens when the concerns with health problems intensifies. (2) Once contact with the health care system had been extablished, there was no evidence to suggest that lack of means to pay for medical services had restricted the quantity of services rendered to the disabled, although inability to pay might have affected the setting in which care was provided. 3) The needed medical care was obtained at a considerable financial sacrifice. As Table 6 shows, the level of direct out-of-pocket payments imposed a heavy burden on low and moderate income households, and this burden eased gradually as household income-levels increased.
BACKGROUND: The relationship between income inequality and health remains controversial in terms of whether or not it exists and, if so, its extent and the mechanisms involved. This study examines the relationship between income inequality, as indicated by the Gini coefficient, and mortality in Italy. METHODS: Cross-sectional ecological study on the 57,138,489 inhabitants living in the 95 provinces existing in Italy in 1994. Multivariate weighted regression analysis of total and age-specific mortality, income inequality, gender, and interaction between income inequality and median income or geographical area. RESULTS: A positive association between income inequality and total mortality was observed for both genders in provinces with a low per capita income and in Southern and Central Italy. The effect was present for infants and for persons over 24 years of age; it was marked for the elderly, particularly women. A negative association with mortality was observed for males living in the North-west. Interactions between income inequality and median income, and between income inequality and geographical area were found. CONCLUSION: In Italy, the relationship between income inequality and health is mixed and not universal, in so far as a positive association was observed only in provinces with lower absolute income. Elderly persons living in Southern Italy represent the population subgroup most vulnerable to unequal income distribution. Income inequality can, in part, explain the historically higher mortality among women in Southern Italy compared to women in the North. These results indicate that income inequality affects the health of population subgroups differentially.
The author investigates income distribution according to gender and race differences in mortality rates in the United States. "This study merges economic and epidemiological literatures. A more extensive application of the Paglin (1975) life cycle hypothesis is proposed. Not only are adjustments made for varying ages, they are also made for varying survival probabilities from one age to the next. Finally, some consideration is also given to the implications of varying morbidity rates across race and gender for the distribution of economic well-being."
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"This paper uses combinations of full brothers, half brothers, and fathers and sons to measure the effect of common family background on a household's income and wealth. While the data are drawn from a nineteenth-century [U.S.] population, the intraclass correlation for income ranges from .13 to .18, which is similar to that found in modern samples. Intraclass correlations for wealth are significantly higher (.18-.35) than are those for income. Intraclass correlations of half brothers compared to those for full brothers suggest that fathers play a dominant role in the transmission of the common family effect. When unobserved background is decomposed into individual and family effects, the individual effect dominates the family effect for income, while the family effect dominates the individual effect for wealth." A comment by Sherwin Rosen is included (pp. 80-2).
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One of the issues currently being debated in the ongoing discussion of the pros and cons of today's globalization concerns the effects of greater world trade as well as of the changes in technology on a country's internal distribution of income, especially on skilled versus unskilled wage rates. In this article, I attempt to spell out some of the arguments concerning internal income distribution that have been put forth both by labor economists and international trade theorists. The impact of globalization on the wage premium between the skilled and unskilled may not be as obvious as is first imagined.
On average, persons receiving Social Security benefits tend to have lower current incomes than do persons paying Social Security taxes. This article documents OASDI's income distributional patterns by dividing the 1992 Current Population Survey population into 10 income deciles and tabulating benefits received and taxes paid by each decile. The benefits and taxes, when compared with non-Social Security income, are progressive: as income rises from decile to decile, the ratio of benefits to income falls, and, except at the highest deciles, the ratio of taxes to income rises. A large component of the current income distributional pattern is associated with age: the young on average receive more income and pay more taxes; the old on average receive more benefits. However, when benefits and taxes are tabulated for income deciles within specific age groups, a general progressivity is still observable, although it is weaker than that for the population as a whole.
The American family income distribution now lies at the center of several controversies. Some observers argue that the American middle class is vanishing, but U.S. census income statistics show income inequality has not changed appreciably since 1947. A second controversy involves whether average living standards have risen or fallen since the major oil price increase of 1973-74. These controversies can be partially resolved by understanding the sharp slowdown in the growth of workers' wages which occurred after 1973 and the demographic trends which kept per capita living standards rising despite stagnant wages, including more working women and low birthrates.
The author attempts to answer two questions: "how does the spatial distribution of population change during the process of development, and how do these changes relate to changes in the size distribution and regional distribution of income. The causal connection between population and income distribution is examined through a simulation model. The theoretical implications of the model's results are empirically examined at several spatial levels: at the national level, with longitudinal data from ten Asian and Latin American nations, and at the regional and subregional levels, with data from Japan, Brazil, and the Philippines. Finally, a multistage model of polarization reversal (with interconnected regional inequality changes) is proposed."
In the relation between income and health it has been suggested that individual level mechanisms are related either to absolute or to relative income. Both absolute income level and the individual's own income in relation to that of others are likely to affect health, but to distinguish between these effects in analyses has been difficult. The aim of this study is to distinguish between the effect on health of one's own position in the income distribution and the effect on health of the individual's ability to consume. Combining data from Sweden, Finland and Norway provides a setting where individuals with the same absolute income level may occupy different positions within their national income distribution. The data come from Swedish, Finnish and Norwegian surveys of living conditions from the mid 1990s. Both the position in the income distribution and the ability to consume is measured by household disposable equivalent income. In order to eliminate differences in price levels, household income is adjusted for purchasing power parities. The outcome measure used is limiting long-standing illness. There was a clear income gradient in health over the individual's relative position in their national income distribution. Stratifying for groups of household income adjusted for purchasing power parities, we still find a significant effect of the individual's relative position. In Nordic welfare states the relative position in the income distribution is related to limiting long-standing illness independently of the ability to consume among individuals with high ability to consume.
The author presents "a framework for analysing the impact of internal and international remittances on rural income distribution. This framework uses predicted income equations to predict (estimate) the incomes of households in two situations: excluding and including remittances. The results are then used to evaluate the changes in income distribution that occur when internal and international remittances are excluded, compared to when they are included.... Data come from a three-year study (1986-87 to 1988-89) of 727 households in three provinces in rural Pakistan." A comment by Zafar Mahmood is included (pp. 1,204-6).
Ecologic studies in the U.S. and elsewhere in the world have demonstrated that income inequality is strongly related to mortality and life expectancy: the greater the dispersion of income within a given society, the lower the life expectancy. However, these empirical studies have been criticized on the grounds that the choice of indicator may have influenced positive findings. Using a cross-sectional, ecologic design, we tested the relationships of six different income inequality indicators to total mortality rates in the 50 U.S. states. The following summary measures of income distribution were examined: the Gini coefficient; the decile ratio; the proportions of total income earned by the bottom 50%, 60%, and 70% of households; the Robin Hood Index; the Atkinson Index; and Theil's entropy measure. All were highly correlated with each other (Pearson r > or = 0.94), and all were strongly associated with mortality (Pearson r ranging from 0.50 to 0.66), even after adjustment for median income and poverty. Thus, the choice of income distribution measure does not appear to alter the conclusion that income inequality is linked to higher mortality. Furthermore, adjustment for taxes and transfers, as well as household size (using equivalence scales), made no difference to the income inequality/mortality association. From a policy perspective, the alternative income distribution measures perform differently under varying types of income transfers, so that theoretical considerations should guide the selection of an indicator to assess the impact of social and economic policies that address income inequality.