Income Inequality and Health in Rural China

As an indicator of social development and human capital, health has aroused ever-increasing concerns. Using CHNS2000 data, we attempt to address the following two issues: how could income inequality influence health; does the rising income inequality result in health inequality, especially will the health of the lower-income group get worse. We find that there is an “inverted-U” association between income inequality and health in rural China. We reveal that the increase in income inequality is beneficial to public health provisions in lower inequality areas, while it has detrimental effect in higher inequality areas. We also find that the rising income inequality strengthens the income effect in higher inequality areas, which means the health of lower-income group is worsening since they are more easily exposed to adverse income shocks.