Does the relationship between income and child health differ across income groups? Evidence from India

This study explores the relationship between child health and socioeconomic status (health-income gradient) using the Indian Human Development Survey-II (2011-12) for children up to 5 years of age. Unlike previous studies our empirical analysis allows the gradient to vary across different income intervals using linear and cubic spline regressions. We use objective measure of child health - height-for-age Z-scores and find that an increase in income, on an average leads to reduction in prevalence of stunting. We also find differential effect of income on health across the income distribution with no effect of income on child health for very poor households. Further we explore underlying factors explaining the gradient and find that maternal health, housing quality, sanitation, non-infectious environment, media exposure to women and a safe neighbourhood are transmission channels that affect child health and together they explain almost 40% of the overall income effect. One of the major implication of our findings is that any policy to increase income of poor households should be complemented with a health policy designed specifically towards children as poor households are less likely to allocate additional income to child health.