This paper investigates the effects of inequality in health on economic growth in low and middle income countries. The empirical part of the paper uses an original cross-national panel data set covering 62 low and middle income countries over the period 1985 to 2007. I find a substantial and relatively robust negative effect of health inequality on income levels and income growth controlling for life expectancy, country and time fixed-effects and a large number of other effects that have been shown to matter for growth. The effect also holds if health inequality is instrumented to circumvent a potential problem of reverse causality. Hence, increasing access to health care for the poor can make a substantial contribution to economic growth not only through its effect on life expectancy but also through its effect on reduced health inequality.

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International Institute of Social Studies of Erasmus University (ISS)
hdl.handle.net/1765/19426
ISS Working Papers - General Series
ISS Working Paper Series / General Series
International Institute of Social Studies of Erasmus University (ISS)

Grimm, M. (2010). Does inequality in health impede growth?. ISS Working Paper Series / General Series (Vol. 501, pp. 1–31). International Institute of Social Studies of Erasmus University (ISS). Retrieved from http://hdl.handle.net/1765/19426