Air pollution, healthcare use, and inequality: Evidence from China

Abstract

This study provides the first investigation into the causal distributional effects of air pollution on healthcare utilization in China. Studies have addressed the average impact of air pollution in developed countries while overlooking its distributional effects in developing nations where inequality is evident. We obtained data from the China Health and Retirement Longitudinal Study and employed wind direction as an instrumental variable. The findings indicate that air pollution significantly increased inpatient care use among individuals aged 60 and above. Moreover, the study documents significant disparities between and within urban and rural populations. The mechanism analysis indicates that accessibility of healthcare services contributes to inequality. Contributing factors include China's Hukou system, health insurance system, and the distance to hospitals in rural areas. The findings indicate that air pollution intensifies health inequality in the developing world while suggesting that policies to increase healthcare equity could generate significant welfare benefits.