Income inequality and health in China: A panel data analysis

Abstract

During the last decades, the level of income inequality in China has increased dramatically. Despite rapid economic growth and improved living conditions, the health performance in China has dropped compared to the period before the economic reform. The "Wilkinson hypothesis" suggests that increased income inequality in a society is correlated to worse health performance. China is a particular interesting case due to the rapid socioeconomic change in the country. This study uses the China Health and Nutrition Survey (CHNS) to address the question of whether income inequality has an impact on individuals' risks of having health problems in China. Unlike previous studies with health measures such as self-reported health or mortality rate, our study uses physical functions to measure individual health. By analysing panel data using county/city-level dummies and year fixed-effects, we found that income inequality does not have a significant impact on individuals' risks of having health problems. This result is robust when changing between different indicators for income inequality.

Keywords: China; Fixed-effects; Health; Inequality; The Wilkinson hypothesis.