The Correlation Between Income Inequality and Population Health: An Empirical Study

Introduction

Income and wealth inequality was quite high a century ago; however, these figures dropped in the 20th century but started to rise at different rates across nations after the 1980s. The 2008 financial crisis did not reverse this trend. The inequalities between the nations mattered more in the 1980s when compared to in-country inequalities globally, today, it is the opposite. The rise in inequality has not been counterbalanced by the increase in social mobility. The reduction in gender pay gap tempered the rise of inequality in recent decades; however, gender inequality remains particularly high among higher income and wealth groups. Racial inequalities remain significant. Evidence suggested that trade and technology alone could not explain significant differences in inequality across developed countries. Changes in taxation and wage policies, as well as differences in education and health systems are significant (Chancel,2019). The wealth of the richest 388 people in the world was equal to the wealth of 3.6 billion people in 2010, and the wealth of the richest 62 people was equal to the wealth of 3.6 billion people in 2015. During the last 25 years, the average annual income of the poorest 10% of the world population increased by less than 3 dollars each year (OXFAM, 2016, p. 2). Despite the increase in global wealth, the difference between the rich and poor has increased every day. The richest 10% earn 40% of the global income, while the poorest 10% earn between 2-7% of the global income. High income inequality threatens social harmony, slows economic growth, and negates efforts to alleviate poverty (EU, 2017, p. 197). Since 1980, the rapid global increase in income inequality as observed in the USA, the global richest 1% would earn 28% of the global income in 2050, while the global poorest 50% would earn 6% share of the global income. If the increase in income inequality would be relatively slow as observed in European nations, it was estimated that the share of the richest 1% will decrease to 19% of the global income, and the share of the poorest 50% will increase to 13% in 2050 (Alvaredo et.al, 2018, p.250). Poverty, one of the significant consequences of income inequality, has also been an important global problem. Especially the extreme levels of poverty during the pandemic and several resulting problems exacerbated this problem. Poverty that increases due to income inequality could lead to further loss of income and negatively affect population health. It was estimated that the severity of the consequences caused by COVID would increase due to the increase in both domestic and international inequalities (OXFAM, 2020, p. 1).