Is Inequality Bad for Our Health?
About This Event

A popular topic in public health research today is that inequality, and in particular income inequality, is one of the most powerful determinants of health and the most important limitation on the quality of life in modern societies.

While a few studies have provided evidence that the greater the disparity of wealth in a society, the less healthy the population, many researchers have gone well beyond what might be warranted by the weight of evidence alone. The World Bank, World Health Organization, and National Institutes of Health have even lent more credibility to the "income inequality as health determinant theory" and its far-reaching implications such as the restructuring of important sections of our economic system.

Jeffrey Milyo of the Irving B. Harris School of Public Policy, University of Chicago, will critique the income inequality hypothesis, its validity and its applicability.

Agenda
9:00 a.m. Registration and Continental Breakfast
9:30 Presentation: Jeffrey Milyo, University of Chicago
Respondents: M. Gregg Bloche, Georgetown University
Nicholas Eberstadt, AEI
Michael McGinnis, Robert Wood Johnson Foundation
Sally Satel, AEI
Discussant: Newt Gingrich, AEI
Moderator: Robert B. Helms, AEI
11:30 Adjournment
Event Summary

October 2001
Is Inequality Bad for Our Health?

Agenda:

9:00 a.m. Registration and Continental Breakfast 
9:30 Presentation: Jeffrey Milyo, University of Chicago
  Respondents: M. Gregg Bloche, Georgetown University
    Nicholas Eberstadt, AEI
    Michael McGinnis, Robert Wood Johnson Foundation
    Sally Satel, AEI
  Discussant: Newt Gingrich, AEI
  Moderator: Robert B. Helms, AEI
11:30 Adjournment

Summary:

There is a perception that inequality, particularly income inequality, is a powerful determinant of health. The implications of this belief, including the possibility of restructuring of our economic system in the name of health, are a subject of great of concern for many. Participants in this health policy conference held late last year discussed the inequality hypothesis. Panelists debated its validity, examined the evidence surrounding it, and considered its implications. Robert B. Helms moderated the discussion. Jeffrey Milyo began with a presentation followed by responses and discussion by M. Gregg Bloche, Nicholas Eberstadt. Michael McGinnis, Sally Satel, and Newt Gingrich.

Introduction
Robert B. Helms, AEI

This topic has generated quite a body of literature. I attended a conference addressing the nonhealth determinants of health at Princeton University. The participants pointed out that the numbers and available theories we have do not always mean what people think they mean. It is very difficult to do good research in this area.

One of the papers presented was by Angus Deaton. He said, "I find it hard to argue that an exclusive focus on health inequalities makes much sense, especially one that targets ratios of mortality rates across different groups."

Then he continued: "What about more general health policies that refocus attention away from health care and health-related behaviors and toward education and income? This seems a much easier case to make, and it is not hard to believe that the current U.S. system pays too much attention to health care delivery and drugs and too little attention to the effects of health on the upstream social and economic arguments." Deaton thought the case for education was stronger than that for income.

He said, "In poor countries, a policy of income provision to the poor may well be more effective than spending the same amount of public funds on a weak health care delivery system." I think those were interesting conclusions.

Presentation
Jeffrey Milyo, University of Chicago

The inequality hypothesis states that inequality, particularly income inequality, has a causal effect on population health, apart from other relevant factors. Even if you controlled for individual behavior and attributes, you would find that a person's health would be worse in communities with the greatest inequality.

So think of inequality as an environmental pollutant affecting your health. It is quite plausible that the effects would be compounded with other disadvantages and, therefore, would be the strongest for the poor. The main idea is that inequality is bad for everyone's health. A number of scholars have jumped to the policy implications of this topic, skipping over any cost-benefit analysis of the health benefits of redistribution.

The inequality hypothesis was derived as a way to explain a number of observations. There are four empirical claims of the inequality hypothesis:

  1. Socioeconomic status is positively correlated with health outcomes often even when other factors are controlled for.
  2. There is not a strong relationship between income and health across countries. This suggests that perhaps it is not the material advantages of income that matters, but relative position within a society.
  3. Specific studies of social hierarchies seem to support this notion. The most famous is the British Whitehall Study of British civil servants in which lower-ranked civil servants were found to have a lower life expectancy after controlling for other relevant factors.
  4. Income inequality, no matter how you measure it, is correlated with health outcomes, no matter how you measure them, across countries, states, and metropolitan areas.

From these claims, proponents of the income inequality hypothesis say we must conclude that relative positioning in a society affects one's health. This is where the income inequality hypothesis comes in.

Two causal mechanisms have been suggested. First, social hierarchies affect the stress levels of individuals, especially in the lower rungs, which can eventually lead to disease or an attempted release manifested in self-destructive behavior. The more indirect link is the hypothesis that inequality or living in a society marked by inequality causes people to view their neighbors as different from themselves and feel less concern for their well-being.

I want to focus on the fourth empirical claim. First, it is not clear what the comparison group should be when we say inequality is bad for one's health. Second, the ecological fallacy says relationships that exist at the individual level are not always manifested in aggregate data. We prefer to test hypotheses about effects on individuals using individual-level data, but for years people were looking at aggregate-level data. A third problem is unobserved factors that might cause inequality to be spuriously correlated with health outcomes. And, finally, as a conceptual problem, the causal pathways that have been hypothesized would seem to suggest a time lag or some required exposure. The idea that inequality causes psychosocial stress, which leads to cardiovascular disease, does not suggest that we should be looking at contemporaneous correlations between inequality and health outcome.

William and Mary's Jennifer Miller and I looked at several decades and found that these correlations are sensitive to both the time period and the number of countries examined. But if you include relevant control variables like education levels in the population, the significance disappears. When we examine changes in inequality across countries, we actually find the opposite relationship.

We have used individual-level data and found that without using any other control variables, living in areas with greater inequality is associated with lower health status. When we add in control variables, the coefficient falls by as much as two-thirds. When finally we account for regional differences, this association disappears.

By now we know enough that there is strong reason to doubt any causal relationship between inequality and health.

Responses

M. Gregg Bloche, Georgetown University Law Center

There is a growing realization that health care has less influence on health than a variety of behavioral and environmental factors that are not well understood. This is making political conservatives quite nervous.

Every industrialized country in the world, except the United States, provides universal access to basic health care coverage, even though it seems not to make an aggregate impact upon health. Even in the United States, there is widespread sentiment that health is a good that should be disseminated apart from the existing unequal distribution of wealth.

So, the thesis that health itself is a product of the existing distribution of wealth poses a political challenge to the current distribution of wealth, and to the institutions that support it.

Inequality per se has not been proven to adversely affect population-wide health. The studies on this topic are equivocal. But let us be clear: the basic thesis that health status is a function of socioeconomic status has not been challenged by Professor Milyo.

As income or wealth increases, there is a diminishing marginal utility in terms of health. So redistribution from the well-off to the worst-off, without a change in average income, will increase population-wide health. On the other hand, population-wide health is itself a function of average income, thus public policies that reduce average income thus risk reducing population-wide health. Aggressive income redistribution jeopardizes incentives that drive economic growth increasing average income. From a health perspective, it is important that we exercise restraint and target the redistributive public spending programs that achieve the biggest bang for the buck.

How does being at that bottom end reduce health? We need research that is aimed at identifying the pathways of this linkage, with an eye toward shaping public policy intervention. This agenda is different from public health's more traditional focus on changing disease-causing lifestyles and behavior in individuals. We should not get distracted by whether inequality per se--the gradient alone--makes a separate difference in health status, while ignoring the differences in average income, education, and other characteristics.

Nicholas Eberstadt, AEI

The proposition that income inequality leads to poor health outcomes originated in the economic development and demographic literature of the 1960s and 1970s, whose data and results seemed to confirm that, other things being equal, a society with a more unequal distribution of income or consumption would have worse health outcomes and higher mortality. I decided to revisit some of these data.

Income and health outcomes correlate both locally and internationally. If inequality affects health outcomes in the first way Professor Milyo talked about, we would expect the societies with the most unequal distribution to have lower levels of life expectancy and higher levels of infant mortality than would be predicted by income alone. And, conversely, we would expect that countries with more even distributions of income would outperform with respect to life expectancy and infant mortality.

I went through the World Development Report and looked at data on the distribution of economic benefits for about 130 different countries. What do we find when we look at the predicted health results for these different countries? Some of the most unequal countries with respect to per capita Gini coefficients consistently outperform in terms of life expectancy than would be predicted on the basis of their income alone. Meanwhile, some countries are performing rather more poorly with respect to life expectancy.

What about infant mortality? If you look at the consumption-based measure, the most unequal countries have a much higher rate than would be predicted on the basis of per capita income. And the most equal in terms of per capita consumption have lower infant mortality rates than expected.

Using international economic data, I can prove that inequality is bad for your health, has no impact on your health, or that it is positively good for your health. The inequality hypothesis is in search of data.

Michael McGinnis, Robert Wood Johnson Foundation

Does this particular issue meet the traditional standards of proof that we set out for our various policy decisions or for our personal actions? Standards of proof are pretty well defined: the consistency, strength, and specificity of the association as well as the degree of exposure and biological plausibility.

The evidence is mixed at this point. With respect to the strength of the association--that is, do all individuals who are exposed find themselves with similar outcomes all of the time--the answer is clearly no. With respect to the specificity of the association--that is, a single cause yielding a single outcome--it is necessary to undertake a messy set of analyses before one can draw conclusions. The potential for confounding variables is substantial. With respect to degree of exposure, called the dose/response relationship, there is some limited evidence. The notion of biological plausibility is very much a work in process. 

My conclusion--as a relatively uninitiated, uninformed individual--would be that the answer to the question, is inequality bad for your health?, is probably yes, but with very different potency for very different people in very different circumstances. The question is, how and for whom?

Health professionals are generally interested in two things: knowledge about what it is that determines health and action related to the most effective pressure points to protect and promote health.

It is possible that income inequality could increase health risk in a fashion similar to that of other aspects of social vulnerability. Are there commonalities in the way that loci of control, empowerment, and self-efficacy work through these biological pathways to decrease immune function and increase health risks? And if so, are there ways in which the health sector can better identify those who have particular vulnerabilities and enhance their longer-term health prospects?

In health philanthropy, we are interested in the notion of social circumstances and complexity. We are interested in a deeper understanding of how various domains intersect to influence health prospects and a deeper understanding of how society can take advantage of those intersections in order to sponsor activities.

Sally Satel, M.D., AEI and the Oasis Clinic

Although the evidence for a causal relationship between income inequality and health is questionable, we are seeing policy objectives advanced on the basis of this claim. What is at stake when medical experts throw themselves into the business of prescribing far-reaching social change? Public health experts have become increasingly eager to expand their professional agenda beyond health and into broader controversies. Many doctors rightly are involved in the policy debates over Medicare, insurance systems, prescription drug benefits, and even tobacco taxes. But when health experts put their energies into utopian visions like social justice, they risk blurring their professional focus, diluting their resources, and, most importantly, forfeiting opportunities for practical ways to help patients and populations in a reasonable period of time.

At its annual meeting, the American Public Health Association will discuss a revised code of ethics for its profession. The code affirms the World Health Organization's rather utopian definition of health: "A state of complete physical, mental, and social well-being, not merely the absence of disease or infirmity." The code also affirms that public health should "advocate for or work for the empowerment of disenfranchised community members." One way in which public health researchers and advocates seek to empower is through research on what are called the social determinants of health: income, community organization, education, and class. The funders of this work must be aware, however, that this is easily politicized.

A memo from the organizers of a Centers for Disease Control seminar series says, "In view of the relationship between health, income, education, race, and social capital, participants are invited to discuss how they can test interventions to change the relationships." Helping the impoverished and promoting quality education are vital social aims. But they are taken on by local governments, not in the name of health specifically, but in the name of the public good.

None of this is to deny that social conditions affect physical well-being and length of life. Public health practitioners have a responsibility to design policies that reliably prevent disease, reduce contagion, and minimize injury. They are mistaken, though, in thinking that they have special expertise in changing income distribution and defining social justice. Health professionals should define their territory more narrowly in ways that help patients and populations directly through disease and injury prevention. This is the classical mission of public health.

Newt Gingrich, AEI

As Nick Eberstadt concluded, what we have is a doctrine in search of data. Why is the doctrine so important that this many people are spending that much time trying to find the data? I would argue that there are two reasons. The first is that there is a rejection of the rise of the modern market system and of having people create wealth--essentially a psychological and cultural rejection of modernism. The current argument over data is simply this decade's manifestation of the attitude.

Second, culture and politics matter. Often, the problems are not irrational, they are nonrational. They are statements of realities that were defendable on essentially cultural grounds. Two of the states with the lowest age-adjusted mortality are the Dakotas. But if you break out the Indian reservations, you would have different numbers. And we are not allowed to talk about it because it is a cultural and political problem, not one of income. Retaining the cultural identity at the expense of health is more acceptable than undertaking a program that would threaten it. Public health is essentially a function of modernity. For example, if you have the president of South Africa explaining that AIDS is not transmitted in any of the ways that we scientifically believe it is transmitted, how do you have an effective preventive health programz?

Preventive health is almost entirely a function of two things. As mentioned earlier, it is either a function of the great nineteenth and early twentieth century model, in which we attempted to eliminate yellow fever or laid concrete pipes so human waste would not sit outside one's door. These breakthroughs were infinitely more important than breakthroughs in personal medicine. So in that setting, there is a zone of public health that is heroic and massive and happens without regard to one's personal habits.

There is a second zone, wherein people are taught the importance of habits such as washing their hands after going to the bathroom. Those common-sense things became middle-class behavior and then were brought to the poor by large voluntary and public-health efforts that were explicitly educational and directly in conflict with traditional patterns.

If we could find a way to have a profound revolution in public health so that no matter how poor someone was those two things happened, mortality would go down, life span would go up, and child survival would increase. These things are a function of social organization, not inequality.

This summary was prepared by AEI research assistant Erin Conroy.

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AEI Participants

 

Nicholas
Eberstadt
  • Nicholas Eberstadt, a political economist and a demographer by training, is also a senior adviser to the National Bureau of Asian Research, a member of the visiting committee at the Harvard School of Public Health, and a member of the Global Leadership Council at the World Economic Forum. He researches and writes extensively on economic development, foreign aid, global health, demographics, and poverty. He is the author of numerous monographs and articles on North and South Korea, East Asia, and countries of the former Soviet Union. His books range from The End of North Korea (AEI Press, 1999) to The Poverty of the Poverty Rate (AEI Press, 2008).

     

  • Phone: 202.862.5825
    Email: eberstadt@aei.org
  • Assistant Info

    Name: Alex Coblin
    Phone: 202.419.5215
    Email: alex.coblin@aei.org

 

Robert B.
Helms
  • Robert B. Helms has served as a member of the Medicaid Commission as well as assistant secretary for planning and evaluation and deputy assistant secretary for health policy at the U.S. Department of Health and Human Services (HHS). An economist by training, he has written and lectured extensively on health policy and health economics, including the history of Medicare, the tax treatment of health insurance, and compared international health systems. He currently participates in the Health Policy Consensus Group, an informal task force that is developing consumer-driven health reforms. He is the author or editor of several AEI books on health policy, including Medicare in the Twenty-First Century: Seeking Fair and Efficient Reform and Competitive Strategies in the Pharmaceutical Industry.
  • Phone: 2028625877
    Email: rhelms@aei.org
  • Assistant Info

    Name: Kelly Funderburk
    Phone: 202.862.5855
    Email: Kelly.Funderburk@AEI.org

 

Sally
Satel
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