Short term household income change and impacts on health

Short term changes in household income have only small effects on health, but have more significant impacts if income is affected by unemployment or chronic health conditions, new research from the University of Otago, Wellington shows.

In a study published in the Journal of Epidemiology and Community Health, researcher Dr Fiona Imlach Gunasekara and colleagues found that an increase of $10,000 in household income over a year increased the likelihood of improving self-rated health by about 1%.

This study used four years of data and observations on more than 7,800 adult respondents from the Survey of Family, Income and Employment (SoFIE) from 2002 to 2005. This is a Statistics New Zealand longitudinal survey which follows the same individuals over time.

Although the overall effect of increases in income on ‘self-rated’ health was small, the researchers say this is consistent with international evidence.

“It’s commonly accepted that poverty increases the chance of poor health,” says Dr Gunasekara. “This is true over long periods of time according to both New Zealand and international research, particularly in childhood. What our study shows is that changes in income over the short term don’t alter health that much.”

However, the SoFIE study did find that becoming unemployed is bad for ‘self-rated’ health, with job loss reducing the likelihood of an individual reporting better health.

Also, for people with two or more chronic health conditions, such as asthma, stroke, heart disease, mental illness or diabetes, an increase in income is associated with significantly improved self-rated health. These people were 10% more likely to report better ‘self-rated’ health with a $10,000 increase in household income.

“This provides a reason to target income support for those individuals who have chronic conditions,” says Dr Gunasekara. “This may be through health prevention activities and financial assistance for those with multiple health issues.”

Dr Gunasekara emphasises that the study looked only at short term effects on health from changes in income. It excluded the effect of chronic or permanent low income on adult health. Other evidence from New Zealand has shown the significance of chronic poverty over the course of a person’s life.

“We recently found that 21% of our SoFIE respondents are chronically in low income – that is, have an average before tax household income of below $27,000 over seven years. This is a high proportion of respondents and has implications for health.” (See media release)

Dr Gunasekara says we also know from cohort studies in Dunedin and Christchurch over many decades that children from low income families have worse health outcomes as adults than children from higher income families.

Research linking chronic low income to health using SoFIE data is currently underway. However, existing evidence suggests that improving health will be best achieved by measures to reduce childhood and long term poverty, chronic disease and unemployment rather than policies that expect ‘a quick fix’ over short time frames.

This study was funded by the Health Research Council.