THE LINK BETWEEN INCOME INEQUALITY AND HEALTH IN CHINA: A NOVEL DECOMPOSITION APPROACH TO DISENTANGLE MACRO AND MICRO EFFECTS

Abstract

This study examines the impact of income inequality on individual health in China and proposes a new method to disentangle the micro mechanism and macro effect of income inequality on health. The study uses data from 1990, 2000, and 2010 to estimate the impact of income inequality on health outcomes. Results show that income inequality has a significant negative impact on health in China, with the micro effect accounting for 72.3% of the overall impact, while the macro effect accounts for 27.7%. The study highlights the need to reduce income inequality in China and implement targeted measures to improve the health of residents.The paper also reviews the theoretical mechanisms of how income inequality affects health, including the macro and individual effects of income inequality, such as direct and indirect mechanisms. The analysis demonstrates the importance of reducing income inequality as a strategy to improve health outcomes in China