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Does income inequality reduce individual subjective wellbeing? A cross-national, multilevel analysis of 53 countries and nearly 80,000 individuals, 2008-2014
AdvisorEvans, Mariah D. R.
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Happiness is so important that Jefferson valued the pursuit of it as much as life and liberty. Its centrality to our lives has led researchers to explore what traits and experiences of individuals affect subjective wellbeing. More recently, across the globe, mainstream discourse stressing and responding to disparities in income has converged on income inequality as reducing wellbeing. Early prior research appeared to support this view, yet these findings were untrustworthy due to methodological problems. Fortunately, more recent research has improved on prior practice, with models incorporating a key potentially confounding variable, socioeconomic development and using appropriate multilevel techniques, demonstrating a null or positive relationship. Yet the issue demands further exploration because income inequality has soared recently and the Great Recession has thrown inequality issues into high relief, so the context is greatly changed. In this era with income inequalities unmatched since the early 20th century, what effect does a country’s level of income inequality have on its citizens’ subjective well-being, net of individual characteristics and socioeconomic development? Replicating recent research, but with new data from the high-inequality era, I demonstrate that in developing nations inequality is not detrimental to subjective wellbeing and may even be beneficial. However, in developed nations, income inequality neither helps nor harms. Hence, the evidence is that in recent years, as in the past, income inequality does not diminish well-being at any level of socioeconomic development. Data are from the integrated World Values/European Values Surveys: 53 nations, 2008 to 2014, with nearly 90,000 respondents. Keywords: happiness, life satisfaction, subjective wellbeing, income inequality