Do Education and Income Really Explain Inequalities in Health? Applying a Twin Design

Ulf-G. Gerdtham, Petter Lundborg, Carl Hampus Lyttkens and P. Nystedt

Scandinavian Journal of Economics, 2016, vol. 118, issue 1, 25-48

Abstract: We apply a twin design to examine the relationship between health and education and income. The estimated associations between health and education and income, controlling for unobserved endowments, at the twin-pair level, are lower than estimates obtained via ordinary least-squares (OLS) on the same sample. Thus, OLS-based effects of education and income are biased, exaggerating the contribution of education and income to health inequality. The main part of health inequality is explained by within-twin-pair fixed effects, incorporating family background and genetic inheritance. It appears that education and income policies have less to offer for reducing health inequality than is usually assumed.

Date: 2016
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