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Decomposition of Health Inequalities

Student: Kristina Potekhina

Supervisor: Ekaterina Aleksandrova

Faculty: St.Petersburg School of Economics and Management

Educational Programme: Applied Economics and Mathematical Methods (Master)

Year of Graduation: 2020

This paper is aimed to determine the factors of growth and decline in the level of health among Russians in the period from 1994 to 2018, to measure the level of health inequality between rich and poor people, as well as to determine the contribution of demographic and socio-economic factors to the overall health inequality. The paper uses panel data from the Russian Longitudinal Monitoring Survey for the period from 1994 to 2018. In order to identify factors of growth and decline in health, the corresponding regression model is evaluated using pooled OLS method and random effects method. Wagstaff and Erreygers concentration indices are used to measure the inequality of health between poor and rich people. The Oaxaca-Blinder method is used to decompose health inequality, which allows to evaluate the contribution of various factors to the overall inequality. According to the results, there is a statistically significant difference in health levels between rich and poor people, with high levels of health "concentrated" in the wealthier group. The decomposition of inequality has shown that about 80% of health inequality is due to an unequal distribution of demographic and socio-economic characteristics between more and less affluent groups of people. The factors such as age, gender, and life satisfaction level make the largest contribution to income inequality in health. The results of the paper can be used to evaluate the effectiveness of public health policy and to develop the tools for reduction of health inequality, which relates to differences in demographic, economic and social characteristics of people.

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