The Impact of Income Inequality on Health of Chinese Residents — Decomposition Based on Individual Effect and Macro Effect

This paper reviews the mechanism of income inequality affecting residents' health, and proposes a new measurement method to decompose the micro mechanism and macro effect of income inequality affecting residents' health. Based on the provincial data onto 1990, 2000 and 2010, an empirical analysis using the multi-period mixed cross-sectional data (Pool Data) model shows that income inequality has a significant negative impact on health in China. The method constructed in this paper is used to decompose the contribution rate of macro effect and individual effect. The results show that the negative impact of macro effect accounts for 27.7%, while the impact of micro effect accounts for 72.3%. With the continuous improvement on GDP per capital in China, the impact of macro effect of income gaps between life expectancy is getting smaller and smaller. The macro effect contribution rate decreases year by year. Therefore, on the one hand, it is necessary to reduce income inequality, but also to take targeted measures to reduce the negative impact of income inequality on individual health.