David R. Henderson  

Is Inequality Bad for Babies?

Always Keep Your Eye on Produc... Signaling Tension...
Here is where inequality comes in--if when Chen and co-authors look at children born to advantaged individuals (meaning married, college-educated and white) in the US, they survive at the same rates as their counterparts in Austria and Finland. But the trio find that children of disadvantaged parents in the US have much lower survival rates than children of disadvantaged parents in the other countries. This may well be because Europe's safety nets make the disadvantaged less disadvantaged.
This is from Richard Green, "One reason to worry about inequality--it is really bad for babies."

He cites NBER Working Paper 20525, "Why Is Infant Mortality Higher in the US than in Europe?", by Alice Chen, Emily Oster, and Heidi Williams.

The NBER paper appears to be carefully done. But, contrary to Green, it does not show that inequality is bad for babies. Here is the authors' policy conclusion:

Instead, the facts documented here suggest that, in general, if the goal is to reduce infant mortality, then policy attention should focus on either preventing preterm births or on reducing postneonatal mortality. Although the former has received a tremendous amount of policy focus (MacDorman and Mathews (2009); Wilcox et al. (1995)), the latter has - to the best of our knowledge - received very little attention. Our estimates suggest that decreasing postneonatal mortality in the US to the level in Austria would lower US death rates by around 1 death per 1000. Applying a standard value of a statistical life of US$7 million, this suggests on a standard cost-benefit test it would be worth spending up to $7000 per infant to achieve this gain. If policies were able to focus on individuals of lower socioeconomic status - given our estimates that advantaged groups do as well in the US as elsewhere - even higher levels of spending per mother targeted might be justified.

Identifying particular policies which could be effective is beyond the scope of this paper and is an area that deserves more research attention. One policy worth mentioning is home nurse visits. Both Finland and Austria, along with much of the rest of Europe, have policies which bring nurses or other health professionals to visit parents and infants at home. These visits combine well-baby checkups with caregiver advice and support. While such small scale programs exist in the US, they are far from universal, although provisions of the Affordable Care Act will expand them to some extent. Randomized evaluations of such programs in the US have shown evidence of mortality reductions, notably from causes of death we identify as important such as SIDS and accidents (Olds et al. 2007).

Whatever you think about the wisdom or ethics of such policies, you need to distinguish such policies from the issue of inequality. Imagine that the government reduced inequality with a higher tax on high-income people, but then spent none of the additional revenues in the way that the authors suggest above. Effect on inequality: a reduction. Effect on infant mortality: zero.

Or consider this policy: the government does not add any resources to help lower-income women but, instead, takes a lot of resources from higher-income white women in their child-bearing years. Effect on inequality: a reduction. Effect on infant mortality: possibly an increase.

Posing the policy issue in terms of inequality simply confuses the issue.

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COMMENTS (10 to date)
JLV writes:

So there's an older literature on health and inequality that has considered whether income inequality is related to measures of population health. In the mid-to-late 1990's, there were a spate of articles that suggested there was a correlation between inequality and mortality. But it turns out that if you control for country (or state, etc.) fixed effects, the correlation disappears. A recent study showing this for infant mortality is here: http://www.sciencedirect.com/science/article/pii/S0277953612003711

Its still possible that there might be a true causal effect, even controlling for time-invariant effects - if there is measurement error in inequality (almost surely true) then the estimated effect would be biased toward zero. But no one has, to my knowledge, addressed this.

I'm generally the sort of person who's priors would suspect an inequality-mortality connection. But after reading the literature, I'm convinced that there (probably) isn't one.

ZC writes:

In addition to the obvious shortcomings of their proposed solutions you point out, it should be noted that their thesis is flawed from the beginning.

"This may well be because Europe's safety nets make the disadvantaged less disadvantaged."

Or, it could be that the 'disadvantaged' in America are poorer decision makers who are even more unfit to be parents than their European peers. Spend even a small amount of time in the labor and delivery section of pretty much any urban, public hospital in the US and you'll leave shaking your head in disgust. We are required to have permits, licenses, and credentials for all sorts of silly things here...but any two morons can give life to a child, irrespective of their fitness to care for or financially support said child.

The most efficacious policy to improve the relative survival rates of the children of the 'disadvantaged' (as they call them in their paper) here in America would be to expand and mandate contraceptive programs. An additional benefit would be an increase in the probability of breaking cycles of transgenerational poverty -- having a kid at 14 isn't good for one's future educational attainment and earnings potential. Too bad such policies would be vehemently opposed by various entrenched interests.

david writes:

That's not the relevant policy lever, though. Increasing the status/political mobilization of low-income-parents would increase both redistributive programs and funding on postneonatal care. Decreasing that status would decrease both.

Charlie writes:

The Green quote is an accurate representation of the paper and he does say explicitly making the disadvantaged less disadvantaged. Green is clearly thinking of reducing inequality in a way that reduces poverty in the quote, so I think it is quite fair to find support in the paper.

That is in line with what Oster said in her EconTalk interview:

"Russ: Although it wouldn't be a bad idea to have everyone be as well-off as they are in Finland. We don't know how to get there. If we knew how to get there. Guest: No, I agree. Yeah, if we knew how to get to a place with less inequality I think that would also be good but I think that might be a slight [?] more complicated. Russ: I would say less poverty. I would not say less inequality. Guest: Right, less poverty. That's exactly right. It is exactly the poverty that is the issue, not the inequality per se. That's exactly right."

To some extent the authors with their policy advice are trying to focus on feasible options:

"Russ: And if the United States, going back to your earlier statements, had the same birthweight and the same socioeconomic status as Finland and Austria, there would be virtually no difference between the infant mortality rates. Guest: Yeah, that's true. Now, of course, that's like, as a policy, get everyone as rich as Finland is pretty daunting. And I think part of the challenge--we're trying to think through whether we can push this forward--is thinking about: are there things you could do that are sort of smaller scale than just like, bring everybody to the income level of Finland, that would kind of ameliorate some of these problems in a kind of more micro, focusing more on this particular issue as opposed to trying to fix the whole setup. Russ: And? Guest: The one thing that we talk about in the paper is some kind of home visiting program..."

Don Boudreaux writes:


With respect, I believe that David's criticism of the way that Richard Green poses the problem as being one of inequality still stands.

The problem (as it is explained by the Chen, Oster, & Williams paper) is that some people in the U.S. are so poor that they lack the resources to enable them to keep their infants alive at the same rate as richer Americans and Europeans keep their infants alive. But a lack of adequate resources is not a problem of inequality; it is a problem of poverty. The two are very different phenomena. While successful government efforts to make poorer people richer might - might - reduce inequality, such efforts will (according to the paper by Chen, et al.) succeed in reducing infant mortality because they reduce poverty rather than because they reduce inequality.

Thomas Sewell writes:

In partial summary of the above comments...

If the best way to make poor people wealthier is to grow the economy overall and along the way increase inequality in it, then inequality is good for babies.

Based on the empirical evidence I've seen, countries with better growth rates which are decreasing their people's absolute poverty measurements also have increased inequality as part of the same process. So the conclusion regarding inequality and keeping poor babies alive is exactly the opposite of Richard Green's conclusion.

Looking forward to someone providing the counter-argument where a country decreased "inequality" while making their poor wealthier faster than an otherwise similar country which increased "inequality".

Ben Kennedy writes:

This is just another David Cay Johnston-style conflation of poverty with inequality, which is really dangerous thinking. I think it's possible to make the case that inequality is actually an essential factor in improving the lives of the poor. Early adopters (often higher income people) create the market opportunities that drive commoditization (where everybody benefits)

Daublin writes:

To pile on a little bit, what would the causal mechanism be for inequality to affect child mortality?

I have a hard time understanding how that would work. A rich person moves into your state--or even into your neighborhood--and so your babies start dying? Why would the presence of rich people cause such a thing?

Charley Hooper writes:


I agree. "Rich neighbors kill babies." It doesn't sound very plausible when you say it simply and directly.

The causal mechanism, if it were to exist, would need to involve some limited resource that wealthy people bid away from less wealthy people.

John B writes:

The problem with much 'research' which sets out to prove the initial proposition, is it being subject to confirmation bais, either excludes or dismisses confounding factors.

I'll bet you that there are fewer drug-taking, and/or single parent, multiple siblings by different father households in Finland and Austria; fewer recent arrivals from impoverished Countries with little understanding or practice of basic hygiene, fewer chronically malnourished mothers than in the USA.

There are many factors which account for child mortality which act jointly, so picking on just one factor without understanding the role of others is hardly scientific.

It is also necessary to explain and support with empirical evidence how inequality in itself makes anyone worse off.

If inequality in itself is a causal agent for worseoffness, then a mere multimillionaire must be worse off by virtue of their inequality with a multibillionaire.

Correlation does not prove causality, but if there is causality, there must be correlation and that means every time.

The effects of inequality, if it be the cause of disadvantage, must be present everywhere on the wealth spectrum, not just where it supports Socialist doctrine.

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