Economic Growth, Inequality, & Health

Proochista ArianaInternational Development & Health

Hilary Term 2009

Points for Reflection

• Inequality of what and between whom?• What is more relevant to health, inequality or

inequity?• Does economic growth exacerbate income

inequalities? What about other inequalities?• How does income inequality affect health?• What are the factors that affect health

inequalities?

Outline• Inequality• Impact of economic growth on income

distribution– Kuznets curve in theory– Income inequalities between countries– Income inequalities within countries

• Measurement Issues• Income Inequality and health• Health inequalities & their social determinants

Inequality of What

• Income• Health• Education• Power• Status• Citizenship• Rights, representativeness, voice

Inequality between Who

• Income groups• Education level• Class; employment grade• Ethnicity; race• Religion• Geography• Gender• Age

Common ‘Inequalities’

• Inequality of health by income quintiles• Inequality of education by Gender• Inequality of rights by ethnicity• Inequality of income by occupation

Equality or Equity• Equality: being the same; identical• Equity: being fair and impartial• Equality or equity in health

– Age– Gender– Genetics

• Matter of values– What is ‘fair’– When are inequalities justifiable?

Equality in Health?

• Denies personal choice• Unrealistically expensive• Unachievable since some determinants of health

are not adjustable

‘health inequality caused by factors amenable to human interventions are considered inequitable’

(source: Asada 2005)

Multi-dimensionality of Poverty

• Poverty of what?– Income– Capabilities– Social exclusion

• Deprivations can occur in different dimensions • Poverty in one dimension does not necessarily

mean poverty in another• Does it matter how we measure poverty?

It Does Matter How we Measure Poverty

Source: Laderchi, Saith & Stewart 2003

Income Empowerment Social Capital Health

Person 1 Poor Poor Poor Poor

Person 2 Non-poor Poor Non-poor Non-poor

Person 3 Non-poor Non-poor Non-poor Non-poor

Person 4 Poor Poor Poor Non-poor

Person 5 Non-poor Poor Poor Non-poor

Differential Deprivations

Measuring Inequalities

Inequality Measures

• Ratio of income quintiles• Gini Coefficient

– Ratio of two areas under Lorenz curve diagrams– Between 0-1 (0%-100%) where 0 indicates perfect

equality and 1 maximum inequality– Gini does not capture where in distribution

inequality occurs

• Theil Index• Atkinson Index

The Impact of Economic Growth onIncome Distribution

Kuznets Theory• Simon Kuznets (1955) “Growth and Income

Inequality”– “Does inequality in the distribution of income

increase or decrease in the course of a country’s economic growth?”

– “What factors determine the secular levels and trends of income inequalities”

• During development, income inequality initially rises but then declines, creating an inverted U-shape

Kuznets Curve

Kuznets Explanation

• Shift from agriculture to industry• Shift from rural to urban (with the urban

settings demonstrating greater inequalities)• Redistributive policies (e.g. taxes)• Education and social programmes

Inequality Trends in England & Wales

Inequality Trends in US

Empirical Evidence

Policies Matter

“it seems to us far better to focus directly on policies, or combination of policies, which will generate growth without adverse distributional effects, rather than rely on the existence or nonexistence of an aggregative, reduced form relationship between per capita income and inequalty”

- Handbook of Income Distribution, Kanbur (2000)

Policies adopted by economies combining growth and improved income distribution

Source: Stewart 2000

Income Inequalities Between Countries

Global Distribution of Wealth

Global Inequality

Income Inequalities within Countries

Growing Inequalities

How Much do the Poor Benefit from Economic Growth?

“Growth really does help the poor: in fact, it raises their incomes by about as much as it raises the incomes of everybody else…” (The Economist, May 27 2000 p.94)

“There is plenty of evidence that current patterns of growth and globalization are widening income disparities and hence acting as a break on poverty reduction” (Justin Forsyth, Oxfam Policy Director, letter to The Economist , June 20th 2000 p.6)

Growth May Benefit Poor, but…

Dollar & Kraay 2002

Variation in Response

• The reduction in poverty resulting form a 1% rate of growth in average household income or consumption ranges from 0.6- 3.5%

• When inequality rising, declines in poverty accompanying EG were 1.3% compared to 9.6% where inequality was falling

Growth, Poverty & Inequality

Source: Ravallion, 2001

Inequality is Still Exacerbated

• Even if the poor do get richer with ‘distribution-neutral growth’, the rich get richer faster thereby exacerbating inequalities

• “For example, the income gain to the richest decile in India will be about four times greater than the gain to the poorest quintile; it will be 19 times higher in Brazil” (Ravallion 2000)

Income Inequality & Health

Relative Income Hypothesis

• The health of individuals within a society depends not only on absolute income (Preston Curve) but the relative distribution of income (income inequality) within that society

• Beneficial effects of absolute income less important than distribution at higher income levels

Inequality is bad for health

• ‘Inequality per se is bad for national health, whatever the absolute material standards of living within a country'.

• “there is a strong, consistent, statistically significant, nonartifactual correlation between national income inequality and population health” (Babones, 2008)

Cross-Country Relationship

Source: Babones 2008

Source: Judge 1998

Inequality and CVD

• In analyses of larger sets of countries with available data, Kim et al (2008) found positive associations between higher income inequality and: mean BMI, obesity prevalence, and CHD DALYs and mortality rates

• income inequality at the national scale is harmful for CVD morbidity, mortality, and selected risk factors (particularly BMI/obesity)

Within Country Relationship

(Source: De Maio, 2008)

Community Level Inequality & Individual Health, China

• Economic growth through abandonment of principle of equality- in agriculture, industry, etc.

• self-reported health status increases with per capita income, but at a decreasing rate

• inequality increases the likelihood and frequency of health-compromising behavior such as smoking and alcohol consumption

(Source: Li & Zhu 2006)

There is as yet considerable controversy and disagreement as

to whether Income inequality negatively affects health

Methodological Difficulties

• the effects of inequality may be inconsistent over samples and periods

• strong selection biases in data availability likely related to income inequality, population health, and national income per capita

• Country level income inequality measures often unreliable

If we accept the relationship does exist, how do we explain it?

‘Income Artefact’ Argument

• ‘A rise in income at the low end of the income distribution has a greater effect on health than does an equivalent rise in income at the high end of the income distribution’

• A transfer of income from a high income to a low-income individual, increases the average population health

• Suggesting that the effect of inequality on health is purely material

(source: Babones 2008)

Counter-Argument

• It is not income per se that is relevant for health but rather psychosocial factors related to relative status created by differential incomes

• ‘Explicit modelling of the income artifact effect indicates that such an effect could explain at most one-half of the marginal relationship between inequality and health in extremely high-inequality countries, one-third of the marginal relationship in typical countries, and one-quarter of the effect in low-inequality countries’ (Babones, 2008)

Alternative Explanations

• Social determinants of health• Hierarchy-health hypothesis• Biological embedding• Family quality and parenting• Allostatic load theory• Chronic Stress• Psychological Resources

SES and Health Pathways

Social Determinants of Health (Marmot et al)

• the circumstances in which people live and work which account for differentials in health outcomes

• adverse and disempowering conditions are associated with low status

• it is not merely income or material assets but the relative affluence and control that distinguish the health of people in different socioeconomic positions:

“What is important is not so much what you have but what you can do with what you have”

Hierarchy-Health Hypothesis (Wilkinson)

based on the ‘psychosocial impact of low social status’ the disruptive influence that has on social cohesion and subsequently health via neuroendocrine pathways

Biological Embedding (Hertzman)

• the means by which to explain differential host resistance to diseases

• the early childhood environment via neurochemical mechanisms affects cognitive, behavioral and social development which in turn influences how we interpret, cope with, and physiologically respond to stressors

• proposes that the biological interpretation of experiences may have a long-term impact on physiological processes that can explain the socioeconomic patterns of morbidity and mortality

‘Allostatic Load’ (Singer & Ryff)

• accumulation of wear and tear resulting from a lifetime of psychosocial stress and genetic predisposition

• Higher ‘allostatic load’ compromises physical and cognitive functioning which then translates to higher levels of mortality and a greater incidence of morbidity

‘Chronic Stress’ (Garofalo & Yali)

• defined as an abnormally persistent stress that may either be episodic or continuous- differentiates socio-economic groups with respect to their health outcomes

• such stresses increase the vulnerability to and severity of infectious diseases, prolong the healing process, reactivate latent viruses and exacerbate chronic diseases processes

‘Psychosocial Resources’ (Taylor & Seeman)

• include optimism, coping, control, and social supports

• can evoke resilience to stress • are differentially distributed among the

different social classes

Environmental Explanations

• Increased exposure, increased vulnerability• Social threats and risks of environment• Different degrees of social support and control

afforded in different environments• Eroding sociability, trust, and reciprocity

(inverse relationship between social capital and inequality)

Behavioural

• class inequities influence health outcomes through exacerbation of behavioral differences (Kaplan and Manuck)

• They argue that interactions within groups and the subsequent reinforcement of group behaviors is more explanatory than the relationship between groups in explaining differentials in health outcomes

Health Inequalities & their Determinants

Inequalities in Health

• Between Countries• Within Countries

– By geography– By income groups– By education level– By occupational class– By ethnicity

LE by Geography

Trends in Child Mortality by Geography

Under 5 Mortality by Income

Infant mortality by mother’s education

Mortality by educational attainment

LE at age 20 by educational attainment

Sickness Spells by Grade of Employment

Mental health of workers by type of contract

Racial/Ethnic Health Differentials

• considerable debate as to whether there is something inherent in race or ethnicity, as currently defined, that would explain the differentials in health outcomes or whether the categorization of race itself perpetuates racial discrimination

• Inherent/genetic or psycho-social manifestations of historical experiences of imbalanced power relations and racism

Genetics or History

• Suggestion that expression of genetic differences, if present, is likely to have been influenced by past and present psycho-social and environmental factors which cannot be discounted even in light of biological explanations

• Disentangling histories of racial discrimination from economic deprivation and the implications they have for exposure and susceptibility has been an as yet insurmountable challenge

• empirical evidence does illustrate that at times, racial differences persist even after controlling for socioeconomic factors

• The additive effect of race above and beyond socioeconomic conditions is thought to be related to discrimination at an individual and institutional level as well as a ‘societal stigma of inferiority’ which exacerbates poor health outcomes (Williams 1999)

Public Health Disparity Geocoding Project

• By Nancy Krieger and colleagues (http://www.hsph.harvard.edu/thegeocodingproject/ )

• Trying to disentangle whether race/ethnicity is an appropriate classification when it comes to health risks

• Adjusting for census tracks substantially reduces race/ethnicity disparities suggesting that it is more living in impoverished areas rather than race/ethnicity that explains the differences in health outcomes

• Suggests that no single common social constructs is sufficient to proxy the others- all are necessary to explain social inequalities in health

Death rates for all causes, United States 2004

Deaths rates for all causes, by sex and Hispanic origin and race: United States, 2004

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Four pathways through which segregation affects fast food density

Kwate, 2008

By Race

Average exposure to fast food across NYC's five boroughs. Exposure is highest in non-residential areas (e.g., central business, shopping, transit, and tourist districts) and in residential areas with high proportions of Black residents (Kwate, 2009)

Social Determinants• the high burden of illness responsible for

appalling premature loss of life arises in large part because of the conditions in which people are born, grow, live, work, and age

• access to health care, schools and education, their conditions of work and leisure, their homes, communities, towns, or cities

• unequal living conditions are the consequence of poor social policies and programmes, unfair economic arrangements, and bad politics

Conditions of Life

• Different Exposures to disease-causing influences in early life

• Different Vulnerabilities• Differences in ability to cope (material,

psychosocial, behavioural)