Background Analyses using classical regression models show that health has significant impact on income. However, in the case of widening income gap, estimating the average effect of health on income would aggregate the inequality of health-income effect for poor workers.
Methods Data came from four waves of China Family Panel Survey data from 2012 to 2018. We generalized a balance panel data including worker characteristics, job information and health status. The final sample of our study includes 19,540 person-year observations aged between 18 to 70 years. Panel Quantile Regression method was used to analyse the effect of health on income for workers under different income distribution.
Results The regression estimates show that the effects of health on income are larger at 25th and 50th quantile of distributions, 21% and 16.9% respectively. We test the robustness by the heterogeneity of workers’ gender and register living regions, find that health is more important for female workers and rural workers. Last, we find that workers who participated in manual labour were more dependent on their health than those involved in brain work.
Conclusions Our findings suggest that the inequality of health-income effect would underestimate the importance of health for lower income workers, especially for poor female and rural ones. In addition, we also find that the mechanism of reduced income effect due to the difference of the employment type.