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Health, social insurance and income.

Article Excerpt
Abstract Health, a form of human capital, can be defined by longevity and physical wellbeing. Social policy decisions require an understanding of the factors that contribute to the creation of health inequalities. To learn more about socioeconomic variables and health capital, this paper examines the relationship between three key variables: health, social insurance, and income, for the Swedish population. Using a randomized research survey design, data from 3,600 participants of a larger Swedish study, conducted in 2005, was analyzed. A linear model of Three Stage Least Squares was chosen to correct for simultaneous bias in the Health, Social Insurance, and Income (HSI) Model. Findings confirm the importance of socioeconomic, behavioral and environmental factors in explaining health inequalities. The results clearly show men, educated people, nonsmokers, individuals that exercise and youngsters possess higher health status than other people. The dependency on social insurance is mainly caused by poor health; a higher degree of social insurance dependency was offset by income increases due to age and higher professional level.

Keywords Health. Structure. Equality. Efficiency. Social insurance. Income

JEL C10. D60. I00. J30

Introduction

Health inequalities continue to be a persistent and growing policy problem in most countries. A fundamental requirement in the development of a social policy to counteract or control such differences is a good understanding of the factors contributing to the creation of health inequalities (Jones and Rice 2005). Health policy decisions deal with, among other things, resource allocation of healthcare services and other activities which may influence health and behaviors of institutions and individuals. Health, as a form of human capital, can be defined by longevity andphysical wellbeing. This paper aims to determine the relationship between three key variables: health, social insurance dependency, and income (HSI), for the Swedish population. Further analysis focuses on population characteristics in relation to health, in an attempt to determine the significance of social and environmental factors in explaining differences in health status.

Background

Nearly 25% of the potential European labor force is dependent on allowances and other benefits from the welfare state. Unemployment, sick leave, and early pensions are the main benefits. Of these, sick leave and early pension correspond to states of incapacity, due to the lack of health and/or the ability to adjust to work demands. Sadly, this situation has deteriorated over the past 30 years (Ferraz-Nunes 1996) because (1) dependency on the welfare state contributes to rigidity in the labor market and...