Income Inequality and Wellbeing

This study investigates the effect of income inequality (gini) on health outcomes across U.S. counties using recent data. Health outcomes are both subjective and objective: mentally and physically unhealthy days, years of potential life lost and low birth weight. Regression models control for many county-level characteristics: county size, per capita income, persistent poverty, percent uninsured, percent unemployed, percent college, and percent Black. In addition, state dummies are included to account for state-level differences. This is a more extensive set of controls than that used in any study so far. Results show that inequality is associated with worse health in terms of all the above measures. The magnitude of the effect is comparable to, or even higher than that of the per capita income. The reason may be that, as suggested in the literature, the level of contextual income does not matter for health in the rich countries, such as the United States. What matters is the distribution of income. This is an ecological study, and hence, it does not claim causal relationship.