The shrinking health gap

Article Highlights

  • Equality in health is arguably a prerequisite for all other measures of well-being.

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  • While health inequality across some demographic groups has increased, it has fallen over the entire population.

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  • Acknowledging trends in income inequality is important, but acknowledging trends in other areas of the human condition may be more important still.

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Acknowledging trends in income inequality is important, but it may be more important to consider trends in other areas of the human condition, such as health. Equality in health is arguably a prerequisite for all other measures of well-being.

Inequality and economic insecurity have been at the forefront of the public's attention in recent years, taking center stage in debates about economic policy. Earlier this year in his inaugural address, President Obama emphasized that "our country cannot succeed when a shrinking few do very well and a growing many barely make it." Later, in his State of the Union address, he noted that "corporate profits have skyrocketed to all-time highs, but for more than a decade, wages and incomes have barely budged."

Remarks like these are based on two stylized facts, emphasized by pundits and academics alike: median incomes have been stagnant in recent decades, and the gap between the rich and poor has increased steadily. These ideas propelled the Occupy Wall Street movement, and they have influenced policymakers’ choices on budget issues.

These two facts are based on well-documented trends in household income over the past 40 years. For example, Emmanuel Saez notes that over the period from 1993 to 2011, average real income increased by 57.5 percent among the top 1 percent of families, but by only 5.8 percent among the bottom 99 percent. However, these statistics are misleading. As most of us readily admit, there is more to life than money. We tend to focus on monetary measures out of convenience. But we also need to consider trends in areas such as happiness, opportunity, leisure, government services, technology, and health. Indeed, equality and security in health is arguably a prerequisite for all other measures of well-being. Yet a remarkably positive trend has been all but ignored: the gap between the health haves and the have-nots has narrowed dramatically in recent years.

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About the Author

 

Sita Nataraj
Slavov
  • Economist Sita Nataraj Slavov specializes in public finance issues dealing with retirement and the economics of aging. Her recent work has focused on whether retiree health insurance encourages early retirement, the impact of widowhood on out-of-pocket medical expenses among the elderly and the optimal time to claim Social Security. Before joining AEI, Slavov taught a variety of economic courses at Occidental College: game theory, public finance, behavioral economics and econometrics. She has also served as a senior economist specializing in public finance issues at the White House's Council of Economic Advisers. Her work at AEI will focus on Social Security and retirement issues.


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    Email: sita.slavov@aei.org
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