Publicly Financed Healthcare and Income Inequality in Canada

Abstract

Income inequality is currently the focus of considerable public and policy attention. Public services such as healthcare and education play a role in reducing income inequality in the population. This study looks at how healthcare affects the distribution of income across five income groups. Specifically, it estimates the tax contributions and the value of benefits received from physician services, drugs and hospital services over a person's lifetime. We found that benefits received from publicly funded healthcare in Canada reduce the income gap between the highest- and lowest-income groups by 16%. This analysis provides a starting point for future research to explore the distributional effects of different options for financing healthcare.

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