Does rising income inequality affect mortality rates in advanced economies?

Abstract

What effect does rising income inequality have on longevity in advanced developed economies? This paper focuses on the effect of income inequality on mortality rates for men and women in a subset of OECD countries over nearly six decades from . Using adult mortality rates at aged sixty-five as the outcome measure of mortality, the latest available data on inverted Pareto-Lorenz coefficient as a measure of income inequality, the authors conduct a range of analysis to investigate the relationship. The findings show that income inequality has a negative effect on mortality rates for both men and women, that is, an increase in income inequality at the top of the distribution does not appear to have a detrimental effect on adult mortality rates in the population of advanced developed countries. For every one unit increase in income inequality, female mortality rates decreased by 0.024 percentage points (p<=0.001) and male mortality rates decreased by 0.052 percentage points (p<=0.001). Dynamic OLS results show that for every one unit increase in income inequality, female mortality rates decreased by 0.032 percentage points (p<=0.01) and male mortality rates decreased by 0.067 percentage points (p<=0.001). The findings remain robust to changes in methodology and the inclusion of control variables including GDP, population and the health capital index. JEL I1 C1