Tuesday October 9, IFN, Institute of Industrial Economics, arranged a seminar on the book Blir vi sjuka av inkomstskillnader? (Is income inequality making us ill?). Three IFN researchers are the authors of this research- and study guide on the subject: Andreas Bergh, Therese Nilsson and Daniel Waldenström. There was a discussion about the difficulties in interpreting the facts, what inequality really is, the need for further research in this field and what politicians can do to facilitate the needs and wishes of people to live a better life.The panel included Ulf Kristersson, Minister for Social Security and Professors Lars Trägårdh and Johan Fritzell.
From left panelists Andreas Bergh, Ulf Kristersson, Johan Fritzell and Lars Trägårdh. Photo: Fredrik Eriksson
The thesis of inequality’s alleged adverse health effects has inspired a large number of research studies. There still remains, however, a series of questions explained the three authors Bergh, Nilsson and Waldenström at the seminar. "The purpose of the book is to expose what we believe might be the link between inequality and health. It is especially important to give the reader an insight into how difficult it is to determine if an effect of inequality exists and how big it is in relation to other health determinants. "
“Especially in the first chapters of the book, you find an instructive narrative in which the authors present a range of possibilities”, explained Professor Lars Trägårdh during the seminar.
Many studies on inequality relate to inequality in an entire country, for example, the average life expectancy. The authors ask what conclusions can be drawn from this, stating that a correlation at the aggregate level does not necessarily mean that there is a relationship at the individual level. "If we draw conclusions about individuals from aggregate data, we risk making a so-called ecological fallacy. In particular, there is a risk of this type of erroneous conclusion when we examine income inequality and health as the link between the individual's income and her health differ between rich and poor. The health gain from an additional $ 100 is generally less for an already rich person compared to the health gains for a poor person."
The book "Blir vi sjuka av inkomstskillnader?" was discussed before an interested audience in a crowded seminar room. Photo: Fredrik Eriksson
The relationship between income and health is non-linear, which means that there seems to be a correlation between inequality and health, even if inequality has no real effect at all on the individual's health. The authors point out that it is not enough to base analysis on aggregated data, often national average, without having access to individual-level data to analyze the inequality effect. It should be noted that almost all previous research has only used aggregated data, which greatly reduces its value.
Results from studies using individual data sets are not as clear cut as the results of the previous studies that are based on aggregate data. However, some patterns can be noted, the authors believe:
Firstly, individual data studies strongly support level effect that is that people with higher living standards also have better health. Even in a rich country like Sweden, there seems to be a positive correlation at the individual level between people's income and health. The relationship may be due to either/or the fact that higher income cause better health, or that people in good health are able to work more and therefore earn more.
Secondly, the inequality hypothesis that people in rich, unequal countries have worse health than people in rich, equal countries seems to "be weakly grounded in data. But it still cannot be dismissed completely." The claim that the inequality effect, insofar as it is found, would mainly appear in rich countries (which is Wilkinson's original hypothesis), the authors explain, is not unequivocally supported in the research.
During the seminar, Andreas Bergh, one of the authors, claimed that politicians' role in regards to people's incomes, is not as vast as politicians may think. Numerous factors interact. Johan Fritzell argued that an effective political action would be to support underprivileged children early in life. This would give the best effect. Also the three IFN-researchers give pointers, though no definitive answers; on what are the most appropriate policy measures of egalitarianism. "If one chooses to believe studies that find support for an inequality effect, the fact remains that income distribution is an extremely complex social performance that change only very slowly over time. As politicians seek foreseeable results of their policies there are many possible measures that have faster and greater effect on public health than changing income distribution. (In the image to the left is Daniel Waldenström, and in the photo to the right is Therese Nilsson, both presenting the research results at the seminar. Photo: Fredrik Eriksson)
Among the book's recurring results is that the income level has a greater impact on how people feel than the inequality effect. According to the authors "policies aimed at improving public health are thus probably most successful when aimed at society's weaker groups. In Sweden, for example, large family supplement is considered to be a way to improve living standards for key groups with fairly great accuracy”.