Equality, longevity and living standards

August 30, 2000

Free Market Foundation

Egalitarians now claim inequality of income leads to poorer health, says economist Gerald Scully, a senior fellow at the National Center for Policy Analysis and professor at the University of Texas at Dallas, Texas, USA.

One effect of unequal income distribution they point to is reduced life expectancy. One measure of inequality is the share of national income going to the lowest income groups in the population. However, a casual look at life expectancy statistics reveals no obvious pattern (see Figure I http://www.ncpa.org/ba/ba328/ba328fig1.gif ):

Sweden, the Netherlands and Belgium all have very high life expectancies and are also considered very egalitarian.

By comparison, Japan is less egalitarian but has a higher life expectancy.

The United States, United Kingdom and Canada have far more income inequality than the above countries, as well as lower life expectancies.

However, life expectancies in the U.S., U.K. and Canada are about the same, even though the U.K. and Canada have national health insurance dedicated to equal care for all and the U.S. does not.

Scully examined the relationship between average life expectancy and per capita gross domestic product (GDP), as well as the degree of income inequality, in 24 advanced countries.

He found there is a positive relationship between life expectancy and a more equal income distribution, and predicts a 7.1-year difference in life expectancy between the most- and least-egalitarian countries.

However, there is also a positive relationship between life expectancy and per capita income, that amounts to a 6.3-year difference in predicted life expectancy between the highest and lowest per capita GDP countries.

When the two effects are considered simultaneously, differences in life expectancy among countries are fully explained by differences in standards of living. Thus it is a society’s level of income, rather than how equally income is (re)distributed, that matters. (See Figure II. http://www.ncpa.org/ba/ba328/ba328fig2.gif )

Source: Gerald Scully (senior fellow, NCPA), “Does the Distribution of Income Affect Life Expectancy?” Brief Analysis No. 328, July 18, 2000, National Center for Policy Analysis.

For text http://www.ncpa.org/ba/ba328/ba328.html

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