Two sides of the same coin? Absolute income and perceived income inadequacy as social determinants of health

BACKGROUND: Absolute income is commonly used in studies of health inequalities, however it does not reflect spending patterns, debts, or expectations. These aspects are reflected in measures concerning perceived income inadequacy. While health inequities by absolute income or perceived income inadequacy are well established, few studies have explored the interplay of absolute income and perceived income inadequacy in relation to health. METHODS: Multiple data sources were linked into a nationally representative dataset (n = 445,748) of Dutch adults (18 +). The association between absolute income, perceived income inadequacy and health (self-reported health, chronic disease and psychological distress) was tested using logistic and Poisson regressions, controlling for various potential confounders (demographics, education) and mastery. Interactions were tested to check the association between perceived income inadequacy and health for different absolute income groups. RESULTS: Perceived income inadequacy was reported at every absolute income group (with 42% of individuals in the lowest income group and 5% of individuals in the highest income group). Both absolute income and perceived income inadequacy were independently associated with health. The adjusted relative risk (RR) for lowest absolute income group is 1.11 (1.08–1.1.14) and 1.28 (1.24–1.32) for chronic disease and self-reported health respectively, and the Odds Ratio (OR) for psychological distress is 1.28 (1.16–1.42). For perceived income inadequacy the RR’s were 1.41 (1.37–1.46) and 1.49 (1.44–1.54) and the OR for psychological distress is 3.14 (2.81–3.51). Mastery appeared to be an important mediator for the relationship between perceived income inadequacy, poor self-rated health and psychological distress. CONCLUSIONS: Absolute income and perceived income inadequacy reflect conceptually different aspects of income and are independently associated with health outcomes. Perceived income inadequacy may be accounted for in health inequality studies, alongside measures of absolute income. In policy-making, targeting perceived income inadequacy might have potential to reduce health inequalities. SUPPLEMENTARY INFORMATION: The online version contains supplementary material available at 10.1186/s12939-023-01945-z.