Essays on economics and demography

Chapter 1 indicates the relevancy of the share of national income concentrated among a country's richest 20% for health outcomes of the lowest three quintiles of the income distribution independent of their personal absolute income. A comparison of 93 countries suggests that the income distance between an individual and the people the individual directly observes at work or in the neighborhood might not be the only form of relative deprivation, but that the distance to the wealthy might matter as well. The results are not caused by the distribution of absolute income: previous research has shown that the level of GDP per capita is the single most important determinant of health outcomes (see Prichett and Summers, 1996), which our results confirm. The chapter discusses possible explanations for the link between income distribution and health outcomes. Suggestions for two explanations are found: public disinvestment in human capital in countries where income is unequally distributed and relative deprivation, i.e. social comparison resulting in stress, risk taking behavior, or unwise consumption expenditure. Chapter 2 investigates the relative efficiency of public and private health care spending in reducing infant and child mortality using cross-national data for 163 countries. The analysis shows that an increase in public funds is both, significantly correlated with lower mortality rates and significantly more efficient in reducing mortality than private health care expenditure. The results indicate that an increase in private health care expenditure might even be associated with higher, not lower, mortality. Although some of the estimated difference in the efficiency of public and private health care expenditure can be explained by geographies and socioeconomic factors, chapter 1 concludes that the indications for such difference are robust.