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Every crisis has a silver lining? Unravelling the pro-cyclical pattern of health inequalities by income

Author

Listed:
  • Max Coveney

    (Erasmus University Rotterdam)

  • Pilar (P.) Garcia-Gomez

    (Erasmus University Rotterdam)

  • Eddy (E.K.A.) van Doorslaer

    (Erasmus University Rotterdam)

  • Tom (T.G.M.) van Ourti

    (Erasmus University Rotterdam)

Abstract

It is well known that income and health are positively associated. Much less is known about the strength of this association in times of growth and recession. We develop a novel decomposition method that focuses on isolating the roles played by government transfers versus market transfers on changes in income-related health inequality (IRHI) in Europe. Using European Union Survey of Income and Living Conditions (EU-SILC) panel data for 7 EU countries from 2004 to 2013, we decompose the changes in IRHI while focusing on possible effects of the 2008 financial crisis. We find that such inequalities rise in good economic times and fall in bad economic times. This pattern can largely be explained by the relative stickiness of old age pension benefits compared to the market incomes of younger groups. Austerity measures are associated with a weakening of the IRHI reducing effect of government transfers.

Suggested Citation

  • Max Coveney & Pilar (P.) Garcia-Gomez & Eddy (E.K.A.) van Doorslaer & Tom (T.G.M.) van Ourti, 2018. "Every crisis has a silver lining? Unravelling the pro-cyclical pattern of health inequalities by income," Tinbergen Institute Discussion Papers 18-066/V, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20180066
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    References listed on IDEAS

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    1. Van Ourti, Tom & van Doorslaer, Eddy & Koolman, Xander, 2009. "The effect of income growth and inequality on health inequality: Theory and empirical evidence from the European Panel," Journal of Health Economics, Elsevier, vol. 28(3), pages 525-539, May.
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    5. Plotnick, Robert, 1981. "A Measure of Horizontal Inequity," The Review of Economics and Statistics, MIT Press, vol. 63(2), pages 283-288, May.
    6. Baeten, Steef & Van Ourti, Tom & van Doorslaer, Eddy, 2013. "Rising inequalities in income and health in China: Who is left behind?," Journal of Health Economics, Elsevier, vol. 32(6), pages 1214-1229.
    7. Erreygers, Guido & Van Ourti, Tom, 2011. "Measuring socioeconomic inequality in health, health care and health financing by means of rank-dependent indices: A recipe for good practice," Journal of Health Economics, Elsevier, vol. 30(4), pages 685-694, July.
    8. Doorslaer, Eddy van & Jones, Andrew M., 2003. "Inequalities in self-reported health: validation of a new approach to measurement," Journal of Health Economics, Elsevier, vol. 22(1), pages 61-87, January.
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    12. repec:dau:papers:123456789/10510 is not listed on IDEAS
    13. Max Coveney & Pilar García‐Gómez & Eddy Van Doorslaer & Tom Van Ourti, 2016. "Health Disparities by Income in Spain Before and After the Economic Crisis," Health Economics, John Wiley & Sons, Ltd., vol. 25(S2), pages 141-158, November.
    14. repec:wly:hlthec:v:25:y:2016:i::p:141-158 is not listed on IDEAS
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    More about this item

    Keywords

    Crisis; inequalities; health; income; decomposition;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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