Income Inequality across the United States: State-Level Inequality and Social Safety-Net Generosity

Background and Purpose: Health disparities by income are well-documented in the United States (e.g. Martinson et al. 2016). Recent evidence has also demonstrated the significant variation in morbidity and mortality by U.S. state of residence (see Chetty et al., 2016; Montez et al., 2016; 2017, and this topic has garnered enough attention to warrant the two year Health of the States Report Series (2016). Less is known about the variation in the relationship between income and health by state of residence, despite the fact that there are important reasons to believe that state contexts matter for income-based health disparities. The theory of fundamental causes of disease (Link & Phelan 1995; Phelan, Link & Tehranifer 2010) suggests that high levels of societal inequality will translate into increased health disparities by income. Within the U.S., inequality by states varies more than between the U.S. and more equal countries such as France, providing an opportunity for a comparison of these state-level contexts. This study examines the magnitude of income inequality in health by U.S. state, and whether state-level social safety net generosity moderates the relationship between income and health across the states.

Methods: We use two nationally representative datasets, the National Health and Nutrition Examination Survey (NHANES) and the National Health Interview Survey (NHIS) to examine the relationship between income and health at the state level. Income at the individual level is estimated using both poverty ratios and relative income quintiles. State-level geocoded data are restricted in both datasets. Measures of inequality (pre- and post-tax/transfer gini coefficients), welfare generosity (see Rodgers et al. 2008; Meyers et al. 2002), and indicators of state health contexts (smoking, education spending, and Medicaid) are merged at the state-level to the restricted NHANES and NHIS. Outcome measures of health include fair/poor self-rated health (SRH), functional limitations, and biomarkers (BMI, diabetes from glycated hemoglobin, cholesterol, triglycerides, c-reactive protein, and hypertension). Controls for age, gender, race/ethnicity, and health behaviors are also included. We estimate multilevel logit models in Stata, where individuals (level 1) are nested in states (level 2).

Results: In all state contexts, the relationship between low income and poor health is statistically significant. However, the magnitude of the income gradient is significantly smaller in West Coast states than in the rest of the United States. Interestingly, these states have varying inequality profiles—the gini coefficient is high (e.g. high inequality) in California, but low in Oregon and Washington. All three states rank as some of the most generous in terms of state-level social safety net generosity.

Conclusions and Implications: State-contexts matter for income disparities in health, and these results demonstrate that state-level social safety net generosity has the potential to reduce the burden of inequality on health for low income Americans.