Income, Health and Health Insurance: Longitudinal Health Selection in Logged Income by Health Insurance Status in Canada

Sean Clouston, McGill University
Amélie Quesnel-Vallée, McGill University

Social inequalities in health are assumed to be economically determined. Health is, however, a possible selector for many opportunities throughout the life course. In Canada, public healthcare was created in part to help mitigate any selection effects that health might have on socioeconomic position. Supplemental insurance may allow for the accumulation of a greater health advantage for individuals over time. This paper assesses the impact of health selection and health change on logged income, while testing whether health insurance moderates outcomes. Data were compiled by the Cross National Equivalence File (CNEF) and represent data gathered by Statistics Canada. Analyses are run using a combination of OLS Regression and Fixed-Effects Regression. Results show that health affects income. Moreover, this relationship is modified by health insurance status in both the OLS and the Fixed Effects models. Findings support theories of health selection in income, particularly in older age groups.