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The effects of community income inequality on health: Evidence from a randomized control trial in the Bolivian Amazon

Eduardo A. Undurraga, Jere Behrman, William R. Leonard and Ricardo A. Godoy

Social Science & Medicine, 2016, vol. 149, issue C, 66-75

Abstract: Research suggests that poorer people have worse health than the better-off and, more controversially, that income inequality harms health. But causal interpretations suffer from endogeneity. We addressed the gap by using a randomized control trial among a society of forager-farmers in the Bolivian Amazon. Treatments included one-time unconditional income transfers (T1) to all households and (T2) only to the poorest 20% of households, with other villages as controls. We assessed the effects of income inequality, absolute income, and spillovers within villages on self-reported health, objective indicators of health and nutrition, and adults' substance consumption. Most effects came from relative income. Targeted transfers increased the perceived stress of participants in better-off households. Evidence suggests increased work efforts among better-off households when the lot of the poor improved, possibly due to a preference for rank preservation. The study points to new paths by which inequality might affect health.

Keywords: Health; Economic inequality; Development; Income transfers; Randomized control trial (search for similar items in EconPapers)
JEL-codes: C93 I14 I15 I38 Z13 (search for similar items in EconPapers)
Date: 2016
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