One of the fundamental causes of health inequalities is the unequal distribution of incomes across the population.
Scottish Government data shows that in 2013 - 14
- the middle 50% had just over half of all income
- the top 2% had nearly 10% of all household income
- the top 10% of households had around a quarter of all household income
- the bottom 40% of households had around a fifth of total household income.
Individual and household incomes are influenced by the tax and social security system, and the employment available.
The distribution of income between individuals and within households is influenced by a range of factors, including
- what is seen as ‘valuable’ work
- how power is distributed in society
- personal characteristics (e.g. age, gender and disability)
- dominant stories within different societies about what is fair.
This can lead to particular groups receiving lower incomes from employment or the state. This includes:
- young people
- households with a disabled member.
How far these incomes stretch is affected by the cost of living.
For more information, you can read the Scottish Government’s briefing on income inequality.
How income affects health
We know that people with higher incomes are healthier. Various long term studies have established that this relationship is largely causal - higher income leads to better health.
The level and distribution of income, and poverty, is a well known cause of health inequalities within populations. It influences health directly through the goods and services that people buy which can support, or damage, their health. It also influences a wide variety of factors that have an indirect impact on health, including social status and control over unforeseen events.
However, it does not mean that those societies with the greatest incomes have the best health outcomes. The reductions in mortality seen across high income countries in the last 150 years have coincided with a prolonged period of long-run economic growth. However, the evidence that economic growth has caused improved health is actually quite weak.
For high income countries such as Scotland, it seems that socio-economic inequalities are one of the most important factors in determining overall health and the extent of health inequalities.
This means that reducing income inequality across a population is an important component of any strategy to reduce health inequalities.
The Scottish Public Health Observatory (ScotPHO) created a tool allowing modelling that shows the likely impact of economic changes on health and health inequalities. It can be used at national or local level to look at the changes in mortality rates and hospital admissions.
The evidence shows that effective action to improve health and reduce health inequalities in relation to income inequality include
- introducing a Living Wage for people employed directly by the public sector
- mitigating the negative impact of welfare reform through the provision of income maximisation services
- increasing the proportion of tax paid by higher income groups and reducing the amount paid by lower income groups.
How cost of living affects health inequalities
Another means of increasing the amount of money people have available is through action on the costs of living. Especially for the poorest groups, greater equity in real incomes can be achieved by reducing the cost of
- housing and the cost of heating the home.
You can find out more about how income affects health inequalities in our Income, wealth and poverty inequality briefing.