Mutual influences of health and poverty. Evidence from German panel data.

While a large body of literature is concerned with the interplay of health and poverty in developing countries, comparable studies for developed countries are rare. Using data drawn from the German Socio-Economic Panel (GSOEP), this paper investigates the relationships between changes in relative income poverty, income changes and health-related quality of life in Germany, i.e. in an environment with nominally equal access to medical care, education and social security. A fundamental five-dimensional health concept is introduced and tested for its empirical performance. The background of the causal analysis is formed by two hypotheses, one regarding low income as a possible cause for poor health (prevention hypothesis) and the other assuming the opposite causal direction (deprivation hypothesis). By means of a descriptive analysis and a structural equations model, the existence of a more complex relational web between health and poverty is demonstrated.