Distributional Orientation and Health Outcomes in OECD Countries

Abstract

This study uses data from the Organisation for Economic Co-operation and Development countries over the 2008–2010 period to construct indicators of “pro-primary” and “pro-secondary” distributions. The former is concerned with the original distribution of income through the market, whereas the latter is concerned with the redistribution efforts of the government. The study ranks these countries along these dimensions to create a distributional orientation map for such countries. It finds that the Scandinavian countries occupy the top rankings in terms of equity in pro-primary distribution, followed by countries with a Bismarckian welfare state regime. The Scandinavian countries also rank very high on equity in pro-secondary distribution, along with some of the top-ranking Bismarckian countries. More significantly, the study finds that the countries’ health outcomes are associated more strongly with the pro-primary distributional stance than with the pro-secondary distributional stance. A key policy implication is that to achieve better and more equitable health, it is more effective to design a level playing field for market participants in the first place, than to try to mend inequities after the fact through remedial social policy.