Ruhr Economic Papers

Ruhr Economic Papers #607

Decomposing Differences in Health and Inequality Using Quasi-Objective Health Indices

by Dörte Heger

RWI, 02/2016, 35 S./p., 8 Euro, ISBN 978-3-86788-704-5 DOI: 10.4419/86788704



People in Canada and the U.S. often make claims regarding whose country has a better health system. Several researchers have attempted to address this question by analysing subjective health in the two countries, thus assuming a common definition of “good” health. Using data from the Joint Canada/U.S. Survey of Health, I generate quasi-objective health indices and show that Canadians and Americans define “good” health differently. After controlling for reporting heterogeneity, health differences between Americans and Canadians are eliminated for intermediate health statuses, while health differences at the tails of the health distribution lead to slightly better average population health in Canada. In both countries, income and education gradients increase steeply with poor health.

JEL-Classification: C43, I13, I14, I18

Keywords: Public health; inequality; Oaxaca-Blinder decomposition