The distribution of income, health and health care: a review of some recent literature

This paper summarizes some of the recent literature on the relationships between income, health and health care spending. At the population level, the associations (or the lack of it) between these variables are well-known. Wealthier developing nations are healthier, though there appear to be decreasing marginal returns to scale: above a certain income level, the association becomes very weak. More recently, some researchers have turned from the analysis of levels to the analysis of distributions across population groups. Many research findings have suggested that the hypothesis that the extent of relative income inequality adversely affects health cannot be rejected. The evidence from the ecological studies on aggregate data awaits confirmation from longitudinal studies at the individual level. Although it seems premature to conclude that mortality rates in high-income, developed countries can be lowered by redistributing income, the body of evidence that has accumulated is sufficiently large to merit further empirical investigation.