What Drives Cross-Country Health Inequality in the EU? Unpacking the Role of Socio-economic Factors

Despite comparable living standards and a nearly universal healthcare provision, there are large cross-country differences in population health in the European Union. More than half of this variation remains unexplained after accounting for macro-level factors. This paper investigates how individual-level differences in demographic characteristics, education, labour market factors and income shape the prevalence of poor self-assessed health in the EU. A semi-parametric decomposition approach is used, which relies on constructing synthetic distributions of health that would prevail in each country if they had similar distributions of socio-economic factors as the country with the best self-assessed population health-Ireland. We find clustering of decomposition results within EU regions. When compared with Ireland, differences in the examined factors explain up to a third of excess poor health in the Southern and Central and Eastern European countries. On the other hand, we could not explain health differences between Ireland and the other Western European countries, which tend to have poorer self-assessed population health but more favourable distributions of socio-economic factors. Cultural differences in reporting styles may be responsible for this result.