Countries that allow economic inequality to increase as they grow richer make their citizens less happy, new research shows.
In most of 78 countries studied people were less satisfied with their lives as their country became less economically equal. Life satisfaction in the UK in 2018 was similar to that in 1981, during a major recession, in part because inequality in the UK had increased so much.
The fall in life satisfaction occurred even where the economy had grown as a whole and people from all classes were generally richer, Dr David Bartram will tell the British Sociological Association’s online annual conference on Thursday 21 April,
Dr Bartram, of the University of Leicester, studied survey data from 1981-2020, cross-referencing how people rated their life satisfaction on a scale from 1 to 10 with their country’s inequality rating.
He will tell the conference that previous research had suggested that higher inequality led to higher life satisfaction, particularly in poorer countries. But in the largest longitudinal study of its kind, he looked at the way countries changed over time, which gave a more accurate picture.
He found that the UK was typical of countries that had lower life satisfaction over time as inequality had risen, falling from 7.7 in 1981 to 7.4 in 1999 as inequality rose, later recovering to 7.8 as inequality fell.
“The data from the UK feeds into a more general finding – in wealthy countries increased inequality has a substantial negative impact on life satisfaction, and inequality has increased in most wealthy countries in recent decades,” Dr Bartram said.
“When inequality increases, people with high incomes don’t benefit much from their gains – many rich people are focused on those who have even more than they do, and they never feel they have enough.
“But people who earn little really suffer from falling further behind – they feel excluded and frustrated by not being able to keep up even with people who receive average incomes.”
Any country that moved from the lowest quarter of countries in terms of inequality to the highest quarter saw a decrease in life satisfaction of around 0.4 on the 10-point scale, he found.
An example was India, where life satisfaction declined from 6.7 in 1990 to 5.8 in 2006 as inequality rose. It later recovered part of the fall, but in 2012 it was still lower than in 1990, despite the country’s prolonged economic boom. A fall in life satisfaction was also particularly pronounced in the USA and Australia.
Countries where inequality had fallen were generally happier over time, including Poland, Peru, Mexico and pre-war Ukraine.
Dr Bartram said his research contradicted some previous work that found that higher inequality could increase life satisfaction. “My paper finds the opposite – higher inequality depresses life satisfaction. Previous researchers have compared across different countries at one point in time, but comparing one country to another isn’t a good way of learning what will happen as inequality increases.”
Notes:
- Dr Bartram combined data from the World Values Survey and the European Values Study, covering a period from 1981 to 2020, with seven rounds for the WVS and five rounds of the EVS. Both datasets include the same life satisfaction question ‘All things considered, how satisfied are you with your life as a whole these days?’, with answers given on a scale from 1 for ‘dissatisfied’ to 10 for ‘satisfied’. He used the Gini measure on inequality from the Solt World Income Inequality Database, offering standardized Gini coefficients covering a wide range of countries. He used the figure corresponding to inequality of ‘disposable’ income, as opposed to ‘market’ income.
- The British Sociological Association’s annual conference takes place online from 20 to 22 April 2022. Around 500 research papers are presented. The British Sociological Association’s charitable aim is to promote sociology. It is a company limited by guarantee, registered in England and Wales. Company Number: 3890729. Registered Charity Number 1080235 www.britsoc.co.uk