Multidimensional Inequality: An Empirical Analysis of its Social and Economic Determinants and Implications

Abstract

The first chapter of the dissertation is titled “Measuring Multidimensional Inequality and Conflict in Africa and in a Global Comparison” and is authored by Joerg Baten and me. We have constructed an indicator that takes into account the multidimensional concept of inequality by considering not only income inequality but also health inequality and land inequality. For all three dimensions we calculated the Gini coefficient and combined them into a joint inequality index by using a normative approach. By doing so, we were able to construct a broad dataset for our joint index from 1810 to 2010 for 193 countries worldwide, which covers 77% of the world population of the last 200 years on average. We find that the risk of a civil war is consistently higher, the higher the level of inequality within a country. We further examine the causal relationship by using an instrumental variable (IV) approach between inequality and the probability of a civil war outbreak. We hereby include countries worldwide, but focus on sub-Saharan Africa, as this region is mainly affected by civil wars and, at the same time, suffers from high inequality levels. Our results suggest that economy-wide inequality increases the risk of civil war.

The single-authored paper in the next chapter deals with the 1918 influenza pandemic and its relationship with inequality. The title of this study is “Social and Economic Disparities and the 1918 Influenza Pandemic: Lessons for Today”. I empirically investigated the relationship between the influenza pandemic of 1918 and inequality, in terms of income and health inequality. I explore several pathways, such as asymmetric health risks, employment, and the demand shock caused by the pandemic. The empirical analysis is based on a sample of 29 countries worldwide. I run first-difference estimations with the change in inequality from the 1910 birth decade to the birth decade of 1920 as the outcome variable. The findings suggest a positive but statistically insignificant correlation between the pandemic mortality rate and income and health inequality. Although I observe an increase in inequality from decade 1910 to 1920 in most world regions, the main empirical result suggests that this cannot be linked to the 1918 influenza pandemic.

Finally, the third study examines possible determinants of inequality; in particular if the introduction of social insurance mitigates inequalities in height. This paper titled “The Heights of Medical Care: Health Insurance and Inequality in Adult Stature” is written together with my co-authors Alberto Batinti, Joan Costa-Font and Joerg Baten. In this long-run study, we globally investigate if the introduction of Universal Health Coverage (UHC) in a country led to a reduction in the level of height inequalities in the following decades. Using a birth cohort approach, we compiled a sample of 134 countries worldwide for the decades 1810 to 2000. With the expansion of health insurance, we observe a positive and substantial reduction in a country’s level of height inequality. To assess the causal relationship, we apply an instrumental variable estimation. Our estimates suggest that within-country differences in height inequality declined with the expansion in health insurance. We conclude that re-forms that reduce financial barriers to accessing health care can have a significant impact on reducing disparities in health, a call for the adaptation of appropriate social policies.