Resources and relative deprivation : analysing mechanisms behind income, inequality and ill-health

Abstract

Even in more egalitarian welfare states health is related to income. Improvements in health are acknowledged over the entire income distribution, albeit with decreasing marginal returns of health at higher income levels. The general purpose of this thesis is to explore and analyse the relation between income and health, focusing on mechanisms of absolute and relative income within this relation. The data used for Sweden is the Swedish Survey of Living Conditions (ULF) and similar cross-sectional data have been used from Britain, Finland and Norway.

The first aim is to compare health inequalities in different macroeconomic and policy contexts, addressed in the first two studies. Study 1 analysed changes in health and health inequalities between mid-1980s and mid-1990s. Results showed that both prevalences of poor health and the size of health inequalities did not change during this period. Considering the macroeconomic changes during this period, results suggest a buffering effect of the welfare state. Study 11 compared the role of income in explaining socioeconomic inequalities in selfrated health in Sweden and Britain. Results showed that the relative size of social inequalities was similar in the two countries. However, income explained a larger part of these inequalities in Britain compared to Sweden.

The second aim - to distinguish between the effects of absolute and relative income on health - was approached in Study Ill. Combining data from Sweden, Finland and Norway provides us with a Nordic welfare state setting where individuals with the same absolute income level may occupy different positions in their national income distribution. The findings suggest that the individual's position in the income distribution is related to limiting long-standing illness also within fairly narrow strata of income adjusted for purchasing power parities, at least among individuals at higher income levels.

Study IV also includes an attempt to separate between health effects of absolute and relative income, but with the main focus on the third aim of the thesis - to explore relative deprivation as a possible mechanism within the income and health relation. Results showed that being relatively deprived in relation to a reference groups was important for men, but even among men of little importance in the lowest 40% of the income distribution. Study V takes an additional step, analyzing the relation between self-rated deprivation and ill-health, assuming that the individual's own preferences of living standard reflect the preferences of the society and the groups the individual belongs to. A significant relation with poor health was found, even after adjustment for social class and lack of cash margin.

The thesis argues that the welfare state and social policy seems to matter for health, for example by reducing the importance of market income in explaining social inequalities in health. Even so, there is a clear relation between income and health even in more egalitarian welfare states. Relative deprivation, both in relation to a reference group and to the individual's own preferences, appears to be one plausible explanation for this, even independent of the individual's ability to consume.