Explaining the differences in income-related health inequalities across European countries

This paper provides new evidence on the sources of differences in the degree of income-related inequalities in self-assessed health in 13 European Union member states. It goes beyond earlier work by measuring health using an interval regression approach to compute concentration indices and by decomposing inequality into its determining factors. New and more comparable data were used, taken from the 1996 wave of the European Community Household Panel. Significant inequalities in health (utility) favouring the higher income groups emerge in all countries, but are particularly high in Portugal and - to a lesser extent - in the UK and in Denmark. By contrast, relatively low health inequality is observed in the Netherlands and Germany, and also in Italy, Belgium, Spain Austria and Ireland. There is a positive correlation with income inequality per se but the relationship is weaker than in previous research. Health inequality is not merely a reflection of income inequality. A decomposition analysis shows that the (partial) income elasticities of the explanatory variables are generally more important than their unequal distribution by income in explaining the cross-country differences in income-related health inequality. Especially the relative health and income position of non-working Europeans like the retired and disabled explains a great deal of 'excess inequality'. We also find a substantial contribution of regional health disparities to socio-economic inequalities, primarily in the Southern European countries.