Europe aims at combining income growth with improvements in social cohesion as measured by income and health inequalities. We show that, theoretically, both aims can be reconciled only under very specific conditions concerning the type of growth and the income responsiveness of health. We investigate whether these conditions held in Europe in the nineties using panel data from the European Community Household Panel surveys. We use pooled interval regressions and inequality decompositions to demonstrate that (i) in all countries except Austria, the income elasticity of health is positive and increases with income, and (ii) that income growth was not pro-rich in most EU countries, resulting in little or no reductions in income inequality and modest increases in income-related health inequality in the majority of countries.

Europe, health inequality, income elasticity of health, income inequality
Distribution: General (jel D30), Personal Income, Wealth, and Their Distributions (jel D31), Health: General (jel I10), Health Production: Nutrition, Mortality, Morbidity, Substance Abuse and Addiction, Disability, and Economic Behavior (jel I12)
Tinbergen Institute Discussion Paper Series
Discussion paper / Tinbergen Institute
Tinbergen Institute

van Ourti, T.G.M, van Doorslaer, E.K.A, & Koolman, A.H.E. (2006). The Effect of Growth and Inequality in Incomes on Health Inequality: Theory and Empirical Evidence from the European Panel (No. TI 06-108/3). Discussion paper / Tinbergen Institute. Retrieved from