Friday, January 25, 2013

Economic Inequality, Health, and Social Wellbeing - by Sam Marshall


Introduction

It has been known for quite some time that the wealthier members of a population tend to be healthier and have longer life expectancies than their poorer counterparts (Preston, 1975). But more recent research has shown that the distribution of wealth within a country can serve as a more holistic predictor of the health of a population as a whole, not only in terms of physical health, but also in terms of social and environmental health. It is becoming increasingly evident that increased economic equality within a country has a positive impact on the health and social wellbeing of that country’s population.

Physical Health

It may come as a surprise to some, but making sure that one has enough money to provide healthcare for themselves and their family members may not be enough to ensure optimal health for these individuals. While it is true that wealthier persons tend to live longer than those possessing less wealth, it is actually beneficial to one’s personal health to make sure that everyone else in the country also has a fair slice of the economic pie. A 2011 article published in Time magazine reports that there is mounting evidence to support the fact that uneven distribution of wealth within a country is one of the greatest predictors of the health of a member of a population, regardless of which socioeconomic group the individual belongs to. In fact, countries such as Japan and Scandinavia, whose residents enjoy some of the lowest levels of economic inequality among developed nations, also boast some of the lowest rates of infant mortality, obesity, heart disease, and mental illness, and have greatly increased life expectancy for their citizens (Szalavitz, 2011).

Environmental Factors and Citizen Health
While there are likely a variety of contributing factors to the link between economic inequality and health, likely one of the most significant factors is the link between income inequality and environmental health. In 2010, Alassane Drabo of the University of Auvergne in France published a study in which he found that unequal wealth distributions negatively affects environmental quality, which in turn worsens a population’s health (Drabo, 2010). In fact, socioeconomic inequality has even been found to be a useful predictor of anthropogenic biodiversity loss (Holland, Peterson, & Gonzalez, 2009). With a loss in biodiversity, the health of any population is in greater jeopardy as food and resource supplies become less stable.

Crime

The link between economic inequality and the health of a population is not only evident in terms of personal health and environmental health. The rate of crime, especially violent crime, can also be a useful tool to measure the health of a society. According to a 2002 joint study by the University of Minas Gerais and the World Bank, “Crime rates and inequality are positively correlated within countries” (Fajnzylber, Lederman, & Loayza, 2002). There are two main factors that have been established as contributing to the rate of crime within a country. One is the potential penalty or risk that could be encountered as a result of committing the crime. The other is the perceived potential gain that could accompany completion of the crime. Since, in a more economically equal society there is less incentive to move up or to “gain,” it comes as no surprise that crime rates, violent crime rates in particular, are lower in these societies as well.

Education

There are clear links between economic inequality and the physical health of a population, but it turns out that there are also implications for social mobility and education levels when economic equality is increased or decreased. The Institute for Research on Poverty at the University of Wisconsin-Madison recently conducted a study in which it was found that as income inequality rises, the unequal distribution of total years of schooling within the population increases by as much as 8 percent and the number of students completing high school or the 11th grade drops significantly (Campbell, Haveman, Sandefur, & Wolfe, 2005). Since there is a causal relationship between education level and eventual income (Bureau of Labor and Statistics, 2012), there is the strong possibility that reduced eventual incomes as a result of fewer years of education could further widen the education gap, thereby creating a feedback loop that could worsen the problem of socioeconomic inequality.

Happiness

Overall health and social relationships are undoubtedly significant contributors to the happiness of a population. But since there are many contributing factors to personal happiness, it is important to evaluate happiness and its correlation with economic inequality independently. In 2011, a study published in the journal Psychological Science found that in the years from 1972 to 2008, “Americans were on average happier in the years with less national income inequality than in the years with more national income inequality” (Oishi, Kesebir, & Diener, 2011). What is particularly interesting about these results is that it was discovered that the inverse relationship between happiness and income inequality was the result of citizens having a decreased sense of trust or fairness, not the result of a change in absolute income.

Demand for Economic Equality

Given the fervor generated by political discussions that concern the economy and wealth distribution in the United States, as well as in other countries, it seems reasonable to assume that opinions regarding what is a fair distribution of wealth vary greatly. However, demand for increased economic equality is perhaps more universal than one would be inclined to think.

Michael Norton and Dan Ariely, of Harvard Busniness School and Duke University, respectively, recently conducted a study in which he first asked a large sample of Americans, representing a wide range of demographics, to estimate the current wealth distribution scheme in the United States. Respondents estimated, on average, that the bottom 40 percent of the population possesses 9 percent of the total wealth and that the top 20 percent possesses 59 percent of the total wealth. So what were the actual numbers? The bottom 40 percent actually possessed only 0.3 percent of the wealth while the top 20 percent possessed 84 percent. 

After establishing that most Americans were highly unaware of the wealth distribution in the United States, the researchers’ next step was to present two possible scenarios for wealth distribution and then to allow respondents to choose the scenario in which they would like to live. One scenario reflected the current wealth distribution in the United States and the other reflected a distribution more equal than that of Sweden’s, the country with the most equal wealth distribution in the world. (Participants, however, were not told that these schemes were based on real countries.) Ninety-two percent of Americans, regardless of age, income, gender, or political party affiliation, preferred the distribution that was more equal than that of Sweden’s (Norton & Ariely, 2011). Clearly there is demand for greater income equality.

Conclusion

Not only does more equal wealth distribution promote citizen health and social wellbeing, but the vast majority of people desire this equality as well. If only we can push past political partisanship and work toward what most of us actually want (even if we don’t know it), then perhaps we can build a society that is healthier, more productive, more educated, and happier than we previously thought possible.



Works cited

Bureau of Labor and Statistics. (2012). Education pays. Retrieved from website:  http://www.bls.gov/emp/ep_chart_001.htm

Campbell, M., Haveman, R., Sandefur, G., & Wolfe, B. (2005). Economic inequality and educational attainment across a generation. Focus, 23(3), 11-15. Retrieved from             http://www.irp.wisc.edu/publications/focus/pdfs/foc233b.pdf

Drabo, Alassane (2010). "Impact of Income Inequality on Health: Does Environment Quality       Matter?,"Working Papers 201006, CERDI. Retreived from        http://ideas.repec.org/p/cdi/wpaper/1132.html

Fajnzylber, P., Lederman, D., & Loayza, N. (2002). Inequality and violent crime. Journal of Law             and Economics, XLV, Retrieved from http://siteresources.worldbank.org/DEC/
            Resources/Crime&Inequality.pdf

Holland, T., Peterson, G., & Gonzalez, A. (2009). A cross-national analysis of how economic       inequality predicts biodiversity loss. Conservation Biology, Retrieved from       http://www.ncbi.nlm.nih.gov/pubmed/19765041

Norton, M., & Ariely, D. (2011). Building a better America - one wealth quintile at a time.            Perspectives on Psychological Science, 6(1), 9-12. Retrieved from     http://pps.sagepub.com/content/6/1/9.short

Oishi, S., Kesebir, S., & Diener, E. (2011). Income inequality and happiness. Psychological           Science, Retrieved from http://pss.sagepub.com/content/early/2011/08/09/
            0956797611417262.abstract

Preston, S. H (1975). The Changing Relation between Mortality and Level of Economic   Development. Population Studies 29 (2): 231–248.

Szalavitz, M. (2011, October 19). How economic inequality is (literally) making us sick. Time,      Retrieved from http://healthland.time.com/2011/10/19/how-economic-inequality-is- literally-making-us-sick/

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