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Global Patterns of Income and Health: facts, interpretations and

policies

By Augus DEATON, October 2006Research Program in Development Studies, Center for Health and Wellbeing, Princeton

University

Presentation by Stéphanie Carret10.11.09

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The planning for today

1. Review of the paper: main ideas2. Analysis of illustrative graphs3. Other views on the subject4. What questions can we raise?

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Dataset used

• Different dataset are used, especially since it’s difficult to compare health levels at an international scale No natural metric of health (which is not the case for income) How to measure inequality with arbitrary chosen measures of health?

• Most of the data used extends between 1960 and 2000 Penn World Table, WDI, WHO and World Bank for China & India

• What are the main health measurements used? Life expectancy Infant & child mortality rates (and absolute levels) Types of widespread deadly diseases worldwide GDP and growth rate

• The Preston curve focuses on the year 2000 Relates GDP/capita to life expectancy

• The author shows that it’s essentiel to make a difference between proportionnate (ratio) and absolute (level) rate of decline of infant and child mortality

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Main ideas (1)

• Main indicators for inequality Poverty; income & wealth inequality Health inequality In an overall, population in poorer countries have shorter

life expectancy and suffer/die from more diseases than in wealthier nations

BUT exceptions: Cuba, Sri Lanka, Costa Rica…

• Historically, the first noticeable global divergence in income & health levels: 18th century This income inequality trend did not reverse But it did for health (beginning 20th & post WWII)

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• Between 1950 and 1990, convergence in international life expectancy which does not mean a link between growth rate/higher income and health levels In poorer countries, infant & child mortality rates have decreased In wealthier countries, mortality rates reduced for elderly people Between 1990 and today, there has been a big break on

international increase of life expectancy because of Aids/HIV

• India & China, health improvements were not correlated with economical growth, or only in small increases

• Income poverty and health poverty are positively correlated Composite measure of wellbeing (income/capita X life

expectancy) > separate inequalities of income or health Other componants impact on income & life expectancy

• Education, political & civil rights, democracy…

Main ideas (2)

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• Deaton argues that life expectancy is misleading when used in international comparison Different patterns of mortality & mortality reduction

(children vs elderly mortality) How to compare different progress in saving lives? Inequality reduction in life expectancy does not mean

reduced health inequality• Decrease of mortality in wealthier countries increased

inequality Data poorly measured (sub-saharian Africa) Lack of vital registration in many countries

• Income growth improves population health? Direct effect: poverty reduction Indirect effect: health poverty reduction

Main ideas (3)

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• Different papers, different variables explaining mortality Poverty & lack of income (Preston) Wagstaff shows the link between high child mortality with lower

expenditure/capita Moser, Leon & Gwatkin show the same but linked to durable

good ownership (wealth measurement) Nutritional Engel Curve « Wealthier is healthier » by Pritchett & Summers show

undoubtedly a strong link between income/capita & child mortality• Also no evidence of good effects of government spending on health

Vulnerability of poor countries facing many diseases• As a conclusion, it seems that economic growth heals

deprivation in health but it’s far from being the only factor Education, especially for women Institutionnal factor: health services and healthcare Reduction in child malnutrition Lowering fertility rates

Main ideas (4)

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Graphic Analysis: The Preston Curve, 2000

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Life expectancy and infant mortality

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Standard deviations of measures of health & income, 1960 to 2004

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Death & Poverty worldwide

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Proportionnal changes: Infant mortality & per capita economic growth

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Proportionnal & Absolute

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Economic Growth & Life expectancy

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Income & Infant mortality, India & China (UN Data)

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Another view: paper analysis

• « The effect of health on economic growth: a production function approach », by D.Bloom, D.Canning, J.Sevilla, in Harvard School of Public Health, 2004

• Data used: 1960-1990, output in GDP, panel of countries• Use of a P° function model of aggregate economic growth, with 2

microeconomics variables of human capital: work experience and health Labor quality is essentiel to economic growth

• In the function: output is a function of its inputs and their linked efficiency (TFP) Physical capital, Labor and human capital with 3 dimensions: education,

experience and health Growth can be decomposed in 2 sources: level of inputs and growth in TFP

• Life expectancy effect on growth appears to be a real labor productivity effect 1 year improvment in life expectancy contributes to an increase of 4% in

output Probably effect on life cycle savings & capital accumulation Growth rates & effeciency of inputs also influence output level

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Questions to be asked

• According to you, what would be the best health measurement? What factors would you chose to put in this measurement?

• Do you think the poor countries would perform any better regarding the Aid/HIV disease if pharmaceuticals lobbies allowed treatment generics?

• How income influences health and how health impacts income & growth? Are poor countries poor because of their poor health? Historically no significant increase in growth comparing to

the huge improvement in health in wealthier counties

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Questions?

Thank you.