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INTRODUCTION
A child born in 1999 in one of the 24 healthiest countries of the world can expect
to live for more than 70 healthy years. By contrast, a child born in one of the 51
least healthy countries can expect to live less than 50 years (11). Why are some
societies healthier than others? An obvious starting point for our inquiry is the
observation that poorer countries have lower levels of average health achievement.
At the individual level, there are cogent grounds for asserting that lack of income
is causally linked to poorer health. Higher incomes provide greater command
over many of the goods and services that promote health, including better nutri-
tion, access to clean water, sanitation, housing, and good quality health services
(10). Although there is little doubt about the effect that individual income has on
0163-7525/02/0510-0287$14.00 287
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life expectancy 76.7 years). The United States is 12th overall on 16 indicators of
health status—behind Japan, Sweden, Canada, France, Australia, Spain, Finland,
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the production of goods and services has conventionally informed the assessment
of standards of living of people, societies, and countries, and to a large extent
continues to do so (2). The informational metric typically used comprises a set
of standard economic indicators such as GDP, per capita income, and scale of
expenditure on, and consumption of, production-related goods and services. Re-
ducing poverty, at the same time, lies at the heart of development economics (28).
A key purpose of economic development, arguably, is to improve the lives of the
majority of people, which in economic terms would entail increasing incomes
and thereby reducing income-based poverty or economic deprivation. As we ar-
gue below, such a narrow definition of economic development seriously truncates
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Even if one accepts poverty reduction as the major goal of economic develop-
ment, radically different policy implications emerge depending on the conceptual
definition of “poverty” adopted. One commonly adopted definition of poverty
draws on Rowntree’s classic concept of a “socially acceptable” amount of money
required to achieve minimum physical efficiency (48). Based on the nutritional con-
tent of various foods and their local prices, a monetary threshold is determined,
and the poverty rate is then the proportion of people living below that amount (22).
This approach—also termed the absolute poverty approach—has been adopted
officially by a number of countries, including the United States (14). The World
Bank defines poverty according to the lowest level of income that is necessary for
purchasing a minimum (subsistence) basket of goods (74). According to this mea-
sure, those unable to secure at least that minimum level of income are considered
to be poor. For the poorest countries the subsistence level of income is set at a per
capita income of $1.00 per day adjusted for purchasing power parity. Absolute no-
tions of poverty thus tend to be prescriptive definitions based on the assessment of
experts about people’s minimum needs and are usually defined without reference
to social contexts or norms (22).
In contrast to the absolute approach to poverty assessment, the relative approach
defines poverty in terms of its relation to the standards that exist elsewhere in so-
ciety. For example, in the Luxembourg Income Study, poverty is measured as a
proportion (less than 50%) of the average disposable income per capita (63). Some
governments also define poverty in relative terms. In Armenia, for example, the
government’s poverty line has been fixed at 40% of median per capita expendi-
ture, with 27% of the population living below this line counted as poor. Indeed,
“relativeness” of deprivation need not always be made in relation to one reference.
For instance, in Nigeria, two poverty lines have been used: those with per capita
expenditures below two thirds of the median are defined as poor; those below one
third of the median are considered very poor.
Although the two are distinct concepts, they are not unrelated. For instance,
if economic growth only helps the non-poor to increase their incomes then the
numbers of people in absolute poverty will remain unaffected, but their relative
poverty will increase because of the increase in the average per capita income.
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Conversely, if economic growth benefits all people across the income distribution,
there may be a reduction in the number of people in absolute poverty, but the
prevalence of relative poverty will remain unchanged. As is evident, both these
approaches are conceptualized at the individual level.
Absolute and relative poverty-based pathways can be conceptualized at a soci-
etal or contextual level and often this distinction is not made clear. Indeed, most
aggregate analysis develops measures of poverty that are individually based but
aggregated at a spatial scale. This can be problematic if appropriate distinctions are
not recognized. For instance, there may be different health implications of being
poor (an individual characteristic) as opposed to, and/or combined with, living in
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between economic development and health. Researchers have used the notion of
poverty without clearly highlighting the unit at which such a process/phenomenon
is being conceptualized.
While it is important to be clear about the unit at which poverty is being ob-
served and understood, it is also necessary to define the evaluation of health in
unambiguous terms. In terms of the unit of observation, it is people who die and
not places. Measures such as life expectancy or infant and child mortality rate
are typical examples of evaluating health at an aggregate level. On the other hand,
health data need not always be aggregated to a spatial unit and can be analyzed and
evaluated at the individual level. What is critical to the process of evaluating pop-
ulation health, however, is the need to distinguish between the average population
health levels of a society, and how equitably is health distributed across different
groups within and between societies. Thus, spatially aggregated health measures
(such as life expectancy, infant mortality) typically provide average levels of health
in a society with no reference to how equally or unequally health is distributed in
that society. Meanwhile, health measures evaluated at the individual level have the
ability to additionally provide an assessment of the health distribution in a society
across various socioeconomic groups of interest. In other words, the framework
for addressing the macro effects of poverty on health can take two dimensions:
To what extent does poverty (a) affect the average health of the populations;
(b) reduce the between-group health inequalities within a country; and (c) reduce
the between-country health inequalities?
As can be seen, there are different ways of conceptualizing poverty and its
connection to health, and each is important in its own right. The objective of
the review, therefore, is twofold; first, to survey the existing evidence between
poverty and health; and second, to assess the extent to which existing literature
has decomposed this connection. Indeed, most studies on poverty and health tend
to conceptualize this connection at an individual level. We draw on evidence from
both developing and developed countries to underscore the global dimensions of
this important issue. Our focus is essentially on the macroeconomic pathways to
aggregate population health and accompanying group inequalities. While there
are other important macro-level pathways, such as primary care physician supply
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(61, 62), health insurance markets, or the role of state health departments and health
systems in general, we focus on income poverty and income inequality, as these
are the two key economic indicators that policy makers usually use to evaluate a
country’s standard of living.
proaches of poverty, study design, and geographical focus, there is a striking con-
sistency in the association between poverty and poor health (77). Beaglehole &
Bonita (3) assert that poverty is the most important cause of preventable death,
disease, and disability.
For developing countries, the two comprehensive sources of evidence for study-
ing the relationship between poverty and poor health are the Living Standard Mea-
surement Surveys (LSMS) and the Demographic and Health Surveys (DHS). While
the LSMS contain very accurate information on households’ level of consumption
and expenditure, there is less detailed information on different health outcomes in
the developing countries. On the other hand, the DHS data are based on very large
samples and contain accurate information on health status and health service use,
especially for maternal and child health services.
For between-country comparisons, Gwatkin et al. (23) used the DHS data from
40 developing countries to analyze inequalities in (a) infant and under-5 mortality;
(b) levels of malnutrition; and (c) incidence of diarrhea and acute respiratory in-
fection. The population in each country was divided in wealth quintiles, according
to an index developed by Filmer & Pritchett (18). They showed that disparities
between poor and non-poor vary enormously across countries, and across regions.
On average, across regions of the world, a child born in a household belonging
to the lowest wealth quintile is roughly twice as likely to die as a child born in a
household from the highest quintile. An interesting finding of the study was that
countries with lower mortality and morbidity rates among children were in gen-
eral also characterized by wider disparities. This finding seems at odds with the
nonlinear relationship between income and health characterized by diminishing
returns to scale. For the above relationship to hold, one or a combination of the
following must be true:
1. Increase in per capita income is associated with increases in income dispar-
ities suggesting that increases in per capita income are not uniform across
groups;
2. A potential negative health externality occurs that is associated with being
poor in a richer country;
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than Gwatkin et al. (see 23), inequalities in infant and under-5 mortality rates
across quintile-expenditure groups in all countries. The focus of both the studies
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by Gwatkin et al. (23) and Wagstaff (68) is on health inequalities, not aggregate
levels of health. Furthermore, these studies, like most, consider health inequalities
along “individual” income lines and not aggregate poverty or economic inequality.
Turning to the between-country data on poverty and aggregate health, some key
findings emerge. The bulk of premature mortality and morbidity affects people
living in the developing world. Ninety-eight percent of the deaths between birth
and 15 years and 83% of the deaths between 15 and 59 years occur in the developing
world (43). At the same time, over 30% (53% in sub-Saharan Africa) of deaths in
the developing world occur in children younger than 5 years. That is why in terms
of disability-adjusted life-years (DALYs) lost, the three main groups of disease
are lower respiratory infections, diarrheal diseases, and perinatal disorders, all of
which are prevalent in the developing world, especially in the poorest countries
and among the youngest and poorer segments of the population.
During the period 1960–1990, income growth contributed to improvements
in under-five mortality rate, adult mortality rate, as well as life expectancy. The
contribution was largest in reducing male adult mortality rate (25%) and the least
in reducing the under-5 mortality rate (17%) (76). Income growth contributed 20%
to the increase in life expectancy (76). At the same time, different countries with
similar level of incomes achieve widely disparate results in mortality rates and
life expectancies. For example, at a GNP per capita of $600, life expectancy is
69 years in Honduras, whereas it is 51 years in Senegal (76).
Summarizing the literature in developing countries, much of the empirical evi-
dence on poverty and health has focused on documenting the associations at the in-
dividual or household level. Few investigators have examined aggregate poverty as
an independent contextual influence on the health of individuals and populations.
Nor have researchers conceptually distinguished between the effects of absolute
versus relative poverty. Although studies have looked at the distribution of health
outcomes across different socioeconomic groups, the documented health dispar-
ities are consistent with either an effect of absolute poverty or relative poverty,
or both. Before we turn to the evidence in developed countries, we turn briefly
to discuss the reverse causal pathway, from poor aggregate health to aggregate
poverty, and thereby, slower economic development.
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and development has gained increased attention since the 1993 World Develop-
ment Report publication (75). This is particularly evident in the recent work and
deliberation of the WHO Commission on Macroeconomics and Health (CMH).
Indeed, this follows the well-established microeconomic evidence; for instance,
Leibenstein (4, 36) showed that workers with lower calorie intake tend to be less
productive, an observation that was followed by a large volume of research linking
education (seen as a form of human capital) to individual economic productivity. In
similar vein, the emerging hypothesis is that a healthy population is a critical input
into poverty reduction, economic growth, and long-term economic development
(64). Specifically, a healthy population, by avoiding premature deaths, chronic
disability, and diseases, limits the economic losses to society.
The macroeconomic evidence tells us that countries with the weakest conditions
of health have a much harder time in achieving sustained growth than do coun-
tries with better conditions of health. According to the CMH preliminary report,
the high human development countries (as measured by the Human Development
Index of the United Nations Development Program) achieved robust and stable
economic growth of 2.3% per year during the years 1990–1998, with 35 of the
36 countries enjoying rising living standards. The growth rate for the same period
for the middle human development countries was 1.9%, with 7 of the 34 coun-
tries experiencing declines in living standards. The poorest human development
countries, meanwhile, experienced a growth close to zero.
Other studies on the contribution of health to economic growth (for example,
see 25) show that perhaps 40% of economic growth in developing countries can
be ascribed to improved health and nutritional status. These new studies seem
to be supported by historical evidence indicating that the initial improvement
in health status was one of the leading causes behind the productivity growth
observed in Britain during the first phase of the industrial revolution (20). In a
more contemporary setting, Gallup et al. (21) provide initial evidence by show-
ing that malaria-affected countries have grown only 0.4% annually in the period
1965–1990, compared with 2.3% annual growth for countries not affected by
malaria.
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for example, Bloom & Williamson (9)], can be summarized as follows: Health
interventions reduce infant and child mortality and so initially swell the young
population. At the same time they induce a decrease in fertility rates. This latter
result may also come about because parents decide the size of their family with
a concern for the number of surviving children. If health interventions decrease
infant mortality rates, they also reduce fertility rates, as parents realize that most
of their children will survive. In short, the demographic transition induces a very
favorable age structure of the population for a certain period, with few young and
old dependents. This favorable age structure may have contributed significantly to
the East Asian economic miracle of the 1970s and 1980s.
times, or even higher, depending on the health outcome studied. Moreover, these
disparities appear to be widening over time in many developed countries (40). The
inability of even rich countries to substantially reduce socioeconomic disparities
in health poses both a challenge to and riddle for development. Clearly, a society’s
health achievement is determined by factors beyond income growth alone.
In summary, the existing evidence is strong and conclusive that poverty reduc-
tion should be a part of an overall macroeconomic strategy to improve population
health. While this is particularly true for developing countries, it is equally rele-
vant for developed countries. The evidence on the contribution of relative poverty
to health—demonstrated by the existence of a socioeconomic gradient in health
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In recent years, growing attention has been focused on the distribution of income
in a society as an independent determinant of population health. There are sound
theoretical reasons for suggesting that inequality in the distribution of income
matters for population health. Given the same level of average income, a more
unequal society is more likely to have greater numbers of people living in poverty,
both in the absolute and relative senses. Because of the concave nature of the
relationship between income and life expectancy (i.e., there are diminishing rates
of return to health with rising incomes), this implies that a redistribution of income
from the rich to the poor will raise average life expectancy (32).
Ecological evidence, at both the cross-country and within-country levels, sug-
gests that the degree of income inequality is indeed related to a society’s level of
health achievement [see (32) and references therein]. More contentious is whether
there is an effect of income inequality per se on population health. To answer this
question, it is necessary to distinguish the effects of poverty from the effects of
income inequality. This requires multilevel study designs that gather information
on income at both the individual and the aggregate levels (67). In other words, stud-
ies need to distinguish between the compositional effects of low income within a
given society and the contextual effects of income inequality. A growing number
of such studies, using some variant of multilevel techniques, have been reported in
the literature, although most of them pertain to data from the United States. Dif-
ferent health outcomes have been examined, including mortality (15, 16, 19, 37),
self-rated health (7, 35, 41, 65, 67), depressive symptoms (27), and health behav-
iors (17).
Four of these ten studies have found no effects, or inconsistent effects of income
inequality on health (15, 16, 19, 41), whereas the remaining six found a small but
independent effect of income inequality even after adjusting for individual-level
income (7, 17, 27, 35, 37, 65). The individual studies are not reviewed here, as they
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have been more extensively discussed by Wagstaff & van Doorslaer (69), Mellor
& Milyo (41), and Deaton (16). Rather, we identify and summarize the key areas
of debate within this literature.
First, investigators have drawn conflicting conclusions about the effect of in-
come inequality on health depending on what variables were controlled for in
statistical models. For the studies examining poor health and income inequality at
the state level in the United States, the relationship is independent of poverty status
at the individual level. However, investigators disagree when it comes to control-
ling for additional variables. For example, Mellor & Milyo (41) find no residual
effect of state-level income inequality on poor self-rated health once they adjust
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for individual educational attainment. Some have argued that this procedure rep-
resents statistical over-adjustment to the extent that inequalities in public spending
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ties may be more relevant for examining processes such as the stress induced by
invidious social comparisons or competition with affluent neighbors.
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The preceding sections traced the major currents that dominate the international lit-
erature on the macroeconomic determinants of health. While most of the literature
defines poverty in mainly income terms, the notions of poverty and development it-
self have undergone revisions. As is clear within the conventional economics view
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overvalues its indirect importance (58). Thus, while putting people at the center of
evaluative procedures, this approach sees human achievements simply as a means
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to an end. In this final section, we highlight one such perspective that, arguably,
alters the way health is positioned in much of the macroeconomics literature. This
refers to what is now called the human-capability or capability-poverty view.
Amartya Sen, the noted economist-philosopher, has convincingly argued that
the process of development, both in theory and practice, should be conceptualized
and assessed as people’s ability to do things that they have a reason to value (51–53,
60). According to this view, development does not simply involve the expansion
of income. Rather, according to Sen, the view that comes closest to the notion of
well-being is one that relates to “what people can do or can be”; what he calls the
capability approach.
Critical to the capability argument is the notion of human freedom (54, 55). In
this way people are placed at the center of the development agenda. While this is not
the first time that the idea of freedom has been invoked, what makes the capability
position different is the proposed type of freedom. The concept of capability per se
is significantly influenced by the notion of positive freedom (“what a person can
actually do”) as against the negative view that perceives freedom as the presence
or absence of interference from others. The general importance of distinguishing
between the ends and the means of development is brought into sharper focus
by considering the intrinsic as opposed to the instrumental view of freedom. The
intrinsic view values freedom for its own sake whereas the instrumental view
considers freedom to be important principally because of its significance for other
achievements. In light of this distinction, Sen (54, 55) specifically proposes that
assessments be based on the positive-intrinsic type of freedom. Good health, in the
sense of freedom from premature mortality and morbidity, is both instrumental to
development and constitutive of it (see 56, 57, 59).
As can be seen, while health is viewed as central to development, its treatment
varies according to the priority given to the ends versus the means of development.
While both have their merits, the capability view is inclusive of the human capital
argument. Besides attaching intrinsic importance to health, the capability view
also takes a broader view of the instrumental benefits that health could bring about
to objectives as broad as social change or as narrow as stabilizing population
growth.
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CONCLUSION
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March 4, 2002 7:51 Annual Reviews AR153-FM
CONTENTS
EPIDEMIOLOGY AND BIOSTATISTICS
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vii
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March 4, 2002 7:51 Annual Reviews AR153-FM
viii CONTENTS
INDEXES
Subject Index 449
Cumulative Index of Contributing Authors, Volumes 14–23 473
Cumulative Index of Chapter Titles, Volumes 14–23 478
ERRATA
An online log of corrections to Annual Review of Public Health
chapters (if any have yet been occasioned, 1997 to the present)
may be found at http://publhealth.annualreviews.org/