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Tuesday, January 19, 2010

Inequality as a Social Cancer?

Lane Kenworthy is skeptical about new research that finds a link between income inequality and health outcomes:

Inequality as a social cancer, by Lane Kenworthy: Income inequality makes a lot of things we care about worse, according to a new book, The Spirit Level: Why Greater Equality Makes Societies Stronger, by Richard Wilkinson and Kate Pickett. Looking across 20 or so rich nations and across the 50 American states, Wilkinson and Pickett find that countries and states with greater income inequality tend to have lower life expectancy, higher infant mortality, more mental illness, more obesity, higher rates of teen births, more murder, less trust, and less upward mobility.
The following plot of life expectancy by income inequality shows a pattern that appears again and again in The Spirit Level.

...The book has received a good bit of attention. ... It’s easy to see why. Many progressives worry about inequality. Here is a book, referencing hundreds of social scientific studies and making extensive use of quantitative data, which says, in effect, that many of our social problems can be significantly eased by reducing income inequality. Is it correct? I was initially skeptical, and after reading the book I remain so.
What’s the causal link?
It wouldn’t be surprising to find that inequality in the income distribution contributes to inequality in health, education, and so on. And there’s plenty of evidence that it does. Wilkinson and Pickett make a different claim: income inequality worsens the average level of health, education, safety, trust, and other good things. How does it do that?
Wilkinson and Pickett say high inequality increases status competition, which in turn increases stress and anxiety, which leads to social dysfunction. ...
Other mechanisms are discussed at various points in the book, including oppositional culture, perceived expectations of inferiority, and humiliation. But stress is the key. ...
Improving social outcomes is certainly a worthwhile aim. What’s the best way to do it? According to Wilkinson and Pickett,
“Attempts to deal with health and social problems through the provision of specialized services have proved expensive and, at best, only partially effective…. The evidence presented in this book suggests that greater equality can address a wide range of problems across whole societies.”
I wish it were that simple. I share Wilkinson and Pickett’s conviction that it would be good for America and some other affluent nations to reduce income inequality, but this book hasn’t convinced me that doing so would help us to make much headway in improving health, safety, education, and, trust. To achieve those gains, my sense is that our best course of action is greater commitment to specialized programs and services, coupled with poverty reduction.
Then again, I’m not certain that Wilkinson and Pickett are wrong. I’ve focused here mostly on the effect of inequality on life expectancy, because that is the social outcome for which the hypothesized causal link (stress) seems most plausible and because it has received the most attention in prior research. I’m skeptical that income inequality has much of an impact on average life expectancy. But perhaps life expectancy will turn out to be the exception to the rule.

[There is quite a bit more detail and two additional supporting graphs in the full post.]

    Posted by on Tuesday, January 19, 2010 at 02:11 AM in Economics, Income Distribution | Permalink  Comments (98)


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