Which Income Inequality Influences Which Health Indicators? Analysis of the Income Inequality Hypothesis with Market and Disposable Gini Indicators

Recent cross-national health studies growingly refute the income inequality hypothesis on the relationship between income inequality and aggregate health after adjusting for control variables with updated international datasets. Few of them, however, use a market income inequality indicator as an independent variable. While the latter measures the exact amounts pocketed by each individual, the former could be related to an individual’s social or economic status. The pooled TSCS regression for the selected 26 industrialized nations over 1995–2010 test the hypothesis with three different income inequality indicators: disposable and market income Gini and ‘tax and transfer effect’. We used the OECD dataset. The disposable income inequality does not have a statistically significant relationship with any of the health indicators except for infant mortality. The market income Gini does have a statistically significant association only with female life expectancy. The relationship between income inequality indicators and health outcomes are dynamic and not consistent.