Child Health and the Income Gradient: Evidence from Australia

The positive relationship between household income and child health is well documented in the child health literature but the precise mechanisms via which income generates better health and whether the income gradient is increasing in child age are not well understood. This paper presents new Australian evidence on the child health-income gradient. We use data from the Longitudinal Survey of Australian (LSAC), which involved two waves of data collection for children born between March 2003 and February 2004 (B-Cohort), and between March 1999 and February 2000 (K-Cohort). This data set allows us to test the robustness of some of the findings of the influential studies of Case et al. (2002) and J.Currie and Stabile (2003), and a recent study by A.Currie et al. (2007) , using a sample of Australian children. The richness of the LSAC data set also allows us to conduct further exploration of the determinants of child health. Our results reveal an increasing income gradient by child age using similar covariates to Case et al. (2002). However, the income gradient disappears if we include a rich set of controls. Our results indicate that parental health and, in particular, the mother's health plays a significant role, reducing the income coefficient to zero. Thus, our results for Australian children are similar to those produced by Propper et al. (2007) on their British child cohort. We also find some evidence that higher incomes have a protective effect when health shocks do arise: for several chronic conditions, children from higher-income households are less likely to be reported as being in poor health than children from lower-income households who have the same chronic conditions. The latter result is similar to some recent findings by Condliffe and Link (2008) on a sample of US children.