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WHAT ROLES DO CONTEMPORANEOUS AND CUMULATIVE INCOMES PLAY IN THE INCOME–CHILD HEALTH GRADIENT FOR YOUNG CHILDREN? EVIDENCE FROM AN AUSTRALIAN PANEL

Authors

  • Rasheda Khanam,

    Corresponding author
    1. School of Accounting, Economics and Finance, University of Southern Queensland, Toowoomba, Queensland, Australia
    2. Australian Centre for Economic Research on Health (ACERH), The University of Queensland, Brisbane, Queensland, Australia
    • Correspondence to: School of Accounting, Economics and Finance, University of Southern Queensland, Toowoomba, Queensland, Australia.

      E-mail: rasheda.khanam@usq.edu.au

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  • Hong Son Nghiem,

    1. Centre of National Research on Disability and Rehabilitation Medicine (CONROD), The University of Queensland, Brisbane, Queensland, Australia
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  • Luke Brian Connelly

    1. Centre of National Research on Disability and Rehabilitation Medicine (CONROD), The University of Queensland, Brisbane, Queensland, Australia
    2. Australian Centre for Economic Research on Health (ACERH), The University of Queensland, Brisbane, Queensland, Australia
    3. School of Economics, The University of Queensland, Brisbane, Queensland, Australia
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ABSTRACT

The literature to date shows that children from poorer households tend to have worse health than their peers, and the gap between them grows with age. We investigate whether and how health shocks (as measured by the onset of chronic conditions) contribute to the income–child health gradient and whether the contemporaneous or cumulative effects of income play important mitigating roles. We exploit a rich panel dataset with three panel waves called the Longitudinal Study of Australian children. Given the availability of three waves of data, we are able to apply a range of econometric techniques (e.g. fixed and random effects) to control for unobserved heterogeneity. The paper makes several contributions to the extant literature. First, it shows that an apparent income gradient becomes relatively attenuated in our dataset when the cumulative and contemporaneous effects of household income are distinguished econometrically. Second, it demonstrates that the income–child health gradient becomes statistically insignificant when controlling for parental health and health-related behaviours or unobserved heterogeneity. Copyright © 2013 John Wiley & Sons, Ltd.

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