The social gradient in health: The effect of absolute income and subjective social status assessment on the individual's health in Europe

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Abstract

Using data on individuals aged between 50 and 65 from 6 European countries, this study investigates the effect of absolute income and subjective social status assessment on health in the light of medical evidence indicating that the individual's position in the social hierarchy undermines his/her mental and physical health. The paper shows that individuals’ own income has a positive, but modest effect on health. Importantly, subjective social status assessment has a significant effect on all health measurements. Finally, the results show that individuals from deprived families (when at the age of 14) have poorer physical and mental health.

Introduction

Research has shown an increase in the risks of ill health, disease, disability and premature death with decreasing socio-economic and occupational standing. Hence, the relationship between health and socio-economic status has received much attention in both the non-economics and, increasingly, economics literatures summarized in Feinstein (1992), Smith (1999) and Lynch et al., 2004a, Lynch et al., 2004b. Furthermore, there is a growing concern among policy makers that these inequalities in health are widening (Wilkinson, 1986, Wilkinson, 1994, Smith, 1999). This large literature is not surprising given the policy importance of understanding the nature of the relationship. Countries with government financed health programmes and countries with a limited institutional involvement in health are finding that it becomes increasingly expensive to supply health services to individuals.

The increasing inequality in health should be particularly evident among the older workforce. People today live longer due to greater affluence, better health care and advances in medicine and this ageing population may present a major challenge in the near future to the public health care services and policy makers. Furthermore, the health and welfare of the older workforce has an impact on their productive capacity and their ability to provide for themselves in retirement. If poverty and deprivation affect the health status of the aged, then increases in the incidence of the above social ills may increase the health bill of the poorest elements of society at the frailer stages of life. Individual hardship aside, this would increase the burden on public health and welfare provision. Furthermore, as the ‘baby boom’ generation now approaches retirement, and hence their decisions regarding post-retirement work become imminent, it is very important for policy makers to identify the mechanics of these relationships in order to guide current and future policy.

Several studies suggest that the fact that individuals higher in the social ladder enjoy better health is primarily a reflection of the social status, rather than of absolute material living standards (Wilkinson and Pickett, 2006). This finding is strongly supported by the fact that the relationship between Gross National Income per capita and life expectancy not only grows progressively weaker as countries get richer, but disappears altogether among the 25–30 richest countries (Marmot and Wilkinson, 2001, Wilkinson, 1997). Yet, low social status and the quality of the social environment are both known to affect health (Berkman and Kawachi, 2000, Marmot and Wilkinson, 1999). As Wilkinson and Pickett (2006) argue, “it is surely unwise to ignore this evidence and conduct analyses as if any given level of individual income had the same effect on health regardless of the social status it buys” (p. 1775). According to Marmot’ “Status Syndrome” (2004), the mechanism through which status affects health is low grade chronic stress. Marmot argues that social status is related to both the control one has over his/her own life and the level of participation in the society. Individuals at the bottom of the social hierarchy experience higher levels of stress due to their inability to control their lives or to participate fully in all that society has to offer. Low grade chronic stress, acting through the brain, mobilizes hormones which affect the cardiovascular and immune systems. In a recent study, Rablen and Oswald (2007) show the importance of social status as a determent of health. They use a sample of Nobel Prize winners and nominees. As one would expect, the Nobel Prize nominees are all scientists with important contributions to their field and similar to the Nobel Prize winners in terms of SES characteristics and behavioural traits. Yet, the authors find that after correcting for potential biases, they show that winning the Nobel Prize, rather than being nominated, is associated with additional longevity.

This study investigates the effect of absolute income and subjective social status assessment, which refers to an individual standing vis-a-vis to his/her peers, on health in the light of evidence indicating that the individual's position in the social hierarchy influences his or her mental and physical health (Marmot, 2004, Rablen and Oswald, 2007) independently of the effect of absolute income. However, it is likely that health affects socio-economic status and vice versa. Hence, the identification of the determinants of the social gradient in health after taking into account the above endogeneity problem is very important, particularly when evaluating policy proposals aimed at alleviating the problems of poor health and low socio-economic status. Therefore, this paper uses an instrumental variable estimation methodology that controls for the ‘endogeneity’ problem to statistically identify the social gradient in physical and mental health.

Section snippets

Data and definitions

The analysis in the paper is carried out using newly collected data, from the SOCIOLD research project.1 This is a European Commission funded project, conducted in six European countries (UK, France, Finland, Denmark, the Netherlands and Greece), that investigates the socio-economic and occupational effects on health inequality of the older workforce. The data collection was targeted on individuals aged

The econometric model

The empirical framework is described by a health production function, where individual health is explained in terms of various socio-economic characteristics, lifestyles, demographics and other related variables.H=αown_inc+βstatus+γX+uwith own_inc and status denoting individual absolute income and subjective social status assessment, respectively, X represents a vector of the remaining SES variables and other covariates3

The empirical results

The IV estimates of the three health production functions (Table 35) highlight the importance of socio-economic factors on individuals’ health and well-being. Through different pathways, past and present deprivation as well as individuals’ social hierarchy have a significant effect on people's physical and mental health.

The results regarding the effect of

Conclusion

This study investigates the effect of absolute income and subjective social status assessment on health in the light of medical evidence indicating that the individual's position in the social hierarchy undermines his or her mental and physical health. It uses an instrumental variable estimation methodology to statistically identify the social gradient in physical and mental health.

After controlling for the endogeneity in the income–health relationship, that is for the fact that individual

Acknowledgements

The authors would like to thank three anonymous referees of this journal for their constructive and insightful comments. The financial support of the European Commission (contract no. QLRT-2001-02292) is gratefully acknowledged.

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