Health contingent income transfers. Are they relevant?

Kjell Arne Brekke and Snorre Kverndokk

No 2014:5, HERO Online Working Paper Series from University of Oslo, Health Economics Research Programme

Abstract: This paper is an extension of Brekke and Kverndokk (2014), which showed that a limited income transfers from a rich to a poor, both with equal health, will increase the concentration index. In this paper we will demonstrate that such health contingent income transfers are implicit in linear models commonly used in the health economic literature, except if the direction of causality is only in the direction of income to health. However, health contingent transfers may also appear with causality from income to health. We show this in a simplified version of a model in Brekke et al. (2011). The prevalence of health contingent transfers in simple models, indicate that such transfers may be as relevant as the non-contingent ones. Together with our previous results this indicates that we may expect the measured health inequality to be higher the more egalitarian a country is.

Keywords: socioeconomic inequality; health inequality; welfare states; health transfers; income transfers; concentration index (search for similar items in EconPapers)
JEL-codes: D31 I12 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2014-12-04
New Economics Papers: this item is included in nep-hea
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