Income Inequality and Health

Question 1

Why Care about Income Inequality?

Answer 1

• Income poverty is bad for health

- Access to additional goods and services are needed to participate as a citizen in the US

Question 2

Wealth Gap

Answer 2

Wealth - the value of a household’s property and financial assets, minus the value of its debts

• Best survey data show that the top 3% of the distribution hold over half of all wealth
• Other research suggests that most of that is held by an even smaller %age at the top

Question 3

Effects of Income Inequality

Answer 3

1. Crime and violence
2. Increased economic segregation
3. Erosion of social cohesion
4. Worse health: most poor outcomes are linked to income inequality (among other factors)

Question 4

• Absolute Income Effect

- Assumptions

Answer 4

1. The concave shape of the relationship between income and health
   predicts = more unequal societies have worse average health (with other conditions remaining the same)
2. Diminishing marginal returns from incremental gains in income

Assumptions:

• the association btwn health and income is causal
• association is concave

Question 5

Relative Income Effect

Answer 5

1. Income Inequality creates a bigger gap between your income and that of those you compare yourself with.
2. The size of the gap increases stress + frustration
   - positional competition, violation of norms and sense of fairness

Question 6

Theory of Relative Deprivation

Answer 6

A person is relatively deprived of X when:

1. She doesn’t have it
2. She sees others have it
3. She wants it and thinks its feasible that she should have it

Question 7

Empirical Evidence of Relative Deprivation:

-cultural consensus vs consonance

Answer 7

Cultural Consensus = seeks to establish locally accepted norms of material consumption

Cultural Consonance = gauges the degree to which the individual is able to conform to the normative standard of consumption

Gap btwn aspiration and reality will predict stress-related health outcomes

Question 8

Yitzhaki Index (TYI)

Answer 8

Test of Relative Deprivation
Relative depression score: responses compared their own incomes to men who were living in the same state, of the same age group, belonging to the same race/ethnicity, same degree of education

1.0 standard deprivation increase in TYI = associated w/ 57% excess mortality risk

Weaknesses - societies are diverse, pple don’t only compare themselves to pple like themselves
-index may not capture family resources

Question 9

Contextual Effect of Income Inequality

Answer 9

• When the incomes of the top 1% pull away from the rest, they cause a variety of pollution effects of the quality of the bottom 99%
• Over and above concavity of effect of absolute income on health, income inequality exerts a direct effect on the health of the individual

People in unequal societies pay a health tax

Question 10

Social Spending

Answer 10

Patterns of social investment
taxes, provision of social benefits
As social distance widens between rich and poor, their interests begin to diverge:
—the rich begin to lobby for lower taxes, etc.

Reduced social spending translates to diminished life opportunities

Question 11

Social Spending:

Effect of Economic Residential Segregation on Political Process

Answer 11

Political process: wider income differences = lower voting and other engagements; less interpersonal trust, less hospitable environments for the socially vulnerable

Question 12

Social Cohesion

Answer 12

Social cohesion represents resources for achieving collective ends (such as attaining health for all), uniting to improve /prevent

-May influence health behaviors of a neighborhood, by promoting more rapid diffusion of health info, increasing adoption of health norms