NCPA - National Center for Policy Analysis

An Alternative Perspective on Health Inequality

December 6, 2012

Many academics tend to look at income inequality as a way to measure overall social welfare. However, other new studies show that lower income groups have seen a dramatic rise in other measures of well-being, such as leisure time and consumption, say Benjamin Ho, of Vassar College, and Sita N. Slavov, of the American Enterprise Institute.

More importantly, lower income groups have seen a decline in health inequality. Whereas previous research has traditionally looked at the difference in health status between people of different socioeconomic classes, a new study adds to existing research by looking at health inequality of people within the same socioeconomic class.

The main measure of health status that the study uses is the realized length-of-life. Some critics argue that health inequality should be measured in terms of the underlying distribution of health risks, rather than inequality in realized health. However, because research of income inequality does not distinguish between realized income and the underlying income generating process, measurements of health equality should also not have to make those types of distinctions.

  • The research finds that people with the lowest income -- those in the 10th percentile of income -- have increased their lifespan by eight years.
  • This gain in longevity is worth around $483,344.
  • However, people in the 90th percentile have improved their lifespan by only two years.
  • This gain is worth around $56,880.

The rising health equality has been able to offset the growing income inequality.

  • For example, between 1975 and 2010 the top 10 percent of households gained an average income increase of $42,819.
  • However, the bottom 10 percent of households gained only $614 in income.

Source: Benjamin Ho and Sita N. Slavov, "An Alternative Perspective on Health Inequality," Economics Bulletin, November 19, 2012.


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