School of Economics

Health and Wealth on the Roller-Coaster: Ireland 2003-2011

David Madden

University College Dublin

Broad Outline• Analysis of developments in income and health “poverty”

over the 2003-2011 period• Analysis of poverty in both dimensions and also correlation

between the two• Also analysis from time-series and cross-section

perspective• Income poverty falls up to 2009, then increases• Health poverty unchanged• Evidence that health inequality decreased• Health/income correlation amongst poor has declined• More detail available in full version of paper (ungated

version at http://www.ucd.ie/t4cms/WP13_05.pdf)

Context (1)• Are recessions good for your health?• Ruhm (2000) said “yes”, but Ruhm (2013) said “maybe”• Chang/Stuckler (2013), Great Recession led to excess

suicides• Not consistent with Walsh and Walsh (2011) for Ireland, also

challenged by Denny (2013)• Deaton (2011), Walsh (2011) – difficulties in relating

movements in SWB to economic cycle• Different dimensions of health may respond differently to

economic cycle• We look at micro-based data, self-assessed health (SAH) • Also issue of income-health correlation within a given cross-

section

Context (2)• Measuring welfare/poverty across multiple

dimensions• Intersection or union approach?• Alkire-Foster attempt to overcome this• Multi-dimensional indices• Gives single index, but black box? Weights?• Dashboard approach – provide information on 2

(at most 3) indices and summary of their correlation

• This talk focuses on measurement – we do not look at explanatory factors

Data• 9 waves of Survey of Income and Living Conditions (SILC)

• Nationally representative sample with information on sources of income, deprivation, health

• Income measure: equivalised disposable income (i.e. including social transfers and with taxes/pension contributions deducted)

• Health: “in general, how good would you say your health is?” Very bad, bad, fair, good or very good

• Good predictor of subsequent morbidities/mortality

• Analysis confined to over 16s (under 16s not asked health question)

• Sample size c.10,000 p.a.

Pα Measures, Income, 2003-2011, Fixed Poverty Line (2003=100)

Pα Measures, Income, 2003-2011, Relative Poverty Line (2003=100)

Health Dominance: 2003-2011

2003 2004 2005 2006 2007 2008 2009 2010 2011

2003 F F

2004

2005 F

2006 S S

2007 S S F F F F

2008 F F F F F F F

2009 S S S F

2010 S S

2011 S S S S

Health Poverty, 2003-2011

Health Poverty, 2003-2011 (with confidence intervals)

The story so far...

• Income poverty falls up to 2009 and then increases

• Health poverty broadly unchanged over period

• Some evidence of marginal reduction in overall health inequality from 2009

• What if we look at them together?

Poverty Incidence by SAH, 2003-2011

Bi-Dimensional Poverty Indices -Fixed Income Poverty Line

Measure of Correlation – All Ages

Measure of Correlation – Under 65s

Measure of Correlation – 25-49

Measure of Correlation – 50-64

Summary

• No evidence that recent recession has been accompanied by meaningful deterioration in health (self-assessed)

• Health inequality seems to have slightly diminished

• Correlation between health and income within the poor (for each cross-section) has declined

• Note these are only two dimensions of welfare (albeit important ones)

• Other health measures?• Also, early days – health effects of recession

could operate with a lag

Poverty Dominance Income2003 2004 2005 2006 2007 2008 2009 2010 2011

2003

2004 WF

2005 F WF WS

2006 F* F* WF S

2007 F* F* F* WF S WF F

2008 F F* WF WF WF F

2009 F F* F* WF WF F F

2010 WF WF F

2011

Sequential Stochastic Dominance2003 2004 2005 2006 2007 2008 2009 2010 2011

2003

2004

2005 WF WF

2006 WF WF

2007 WF WF WF WF

2008 F WF WF WF WF WF WF

2009 F WF WF WF WF WF WF WF

2010 WF WF

2011

Bi-Dimensional Poverty Indices - Relative Income Poverty Line