The effect of growth and inequality in incomes on health inequality: Theory and empirical evidence from the European panel

Europe aims at combining income growth with improvements in social cohesion as measured by income and health inequalities. We show that, theoretically, both aims can be reconciled only under very specific conditions concerning the type of growth and the incomeresponsiveness of health. We investigate whether these conditions held in Europe in the nineties using panel data from the European Community Household Panel surveys. We use pooled interval regressions and inequality decompositions to demonstrate that (i) in allcountries except Austria, the income elasticity of health is positive and increases with income, and (ii) that income growth was not pro-rich in most EU countries, resulting in little or no reductions in income inequality and modest increases in income-related health inequality in the majority of countries.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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