Health status convergence at the local level: empirical evidence from Austria

INTRODUCTION Health is an important dimension of welfare comparisons across individuals, regions and states. Particularly from a long-term perspective, within-country convergence of the health status has rarely been investigated by applying methods well established in other scientific fields. In the following paper we study the relation between initial levels of the health status and its improvement at the local community level in Austria in the time period 1969-2004. METHODS We use age standardized mortality rates from 2381 Austrian communities as an indicator for the health status and analyze the convergence/divergence of overall mortality for (i) the whole population, (ii) females, (iii) males and (iv) the gender mortality gap. Convergence/Divergence is studied by applying different concepts of cross-regional inequality (weighted standard deviation, coefficient of variation, Theil-Coefficient of inequality). Various econometric techniques (weighted OLS, Quantile Regression, Kendall's Rank Concordance) are used to test for absolute and conditional beta-convergence in mortality. RESULTS Regarding sigma-convergence, we find rather mixed results. While the weighted standard deviation indicates an increase in equality for all four variables, the picture appears less clear when correcting for the decreasing mean in the distribution. However, we find highly significant coefficients for absolute and conditional beta-convergence between the periods. While these results are confirmed by several robustness tests, we also find evidence for the existence of convergence clubs. CONCLUSIONS The highly significant beta-convergence across communities might be caused by (i) the efforts to harmonize and centralize the health policy at the federal level in Austria since the 1970s, (ii) the diminishing returns of the input factors in the health production function, which might lead to convergence, as the general conditions (e.g. income, education etc.) improve over time, and (iii) the mobility of people across regions, as people tend to move to regions/communities which exhibit more favorable living conditions.JEL classification: I10, I12, I18.