The Gradient of Health and Wealth: An Analysis of the Effect of Income on Health of Children in China

Abstract

Since the Economic Reform of 1978, China experienced tremendous economic success. While people’s living standards continued to amplify due to rising GDP per capita across the country, income inequality between different regions and areas widened as well. Not only did income inequality soared up, regional and urban-rural health disparity also skyrocketed. I began to look into a possible explanation between the rising income inequality and health inequality as many literatures suggest a strong link between them. Additionally, to narrow the scope of the research and to emphasize on the criticality of early development to a country’s later success, the subject of this study is limited to children aged 10 – 15. Namely, what is the effect of income on health of children in China. This research uses longitudinal data from the Chinese Family Panel Studies, a survey conducted by the Institute of Social Science Survey at Peking University. It consists of interviews with 14,798 sample households, including all the individuals living inside the households. Data is then extracted to run multivariate regressions to analyze the underlying mechanism between income inequality and health inequality. Early findings show income inequality has no effect on regional and urban-rural health inequality. The greatest contributors to health disparity is the imbalance in development of health resources such as nutrient, living condition, health service, and education. Additionally, income only has an effect on health outcomes in less developed areas. Therefore, to decrease health disparity in China, policies aimed to improve health resources in less developed areas is needed instead of redistribution of income.