Growing Income Inequality Tied to Unhappiness

By Rick Nauert PhD Senior News Editor
Reviewed by John M. Grohol, Psy.D.on June 15, 2011

A new psychological study warns that economic disparities seems to make people unhappy.

Over the last 40 years, “we’ve seen that people seem to be happier when there is more equality,” says University of Virginia psychologist Dr. Shigehiro Oishi, who lead the study.

“Income disparity has grown a lot in the U.S., especially since the 1980s. With that, we’ve seen a marked drop in life satisfaction and happiness.”

The findings hold true for about 60 percent of Americans—people in the lower and moderate income brackets.

The psychologists studied survey data for more than 48,000 respondents over 37 years. Researchers examined the relationships among the answers to one question rating happiness on a three-point scale and two indicating the respondents’ sense of how fair and trustworthy their fellow Americans were.

These answers were analyzed alongside the individual’s income and a globally recognized instrument measuring national income equality in each survey year.

Investigators discovered the gap between people’s own fortunes and those of people who are better off is correlated with feelings that other people are less fair and less trustworthy, and this results in a diminished sense of well-being in general.

Psychologists discovered that the wealthy did not perceive an inequity. For the richest 20 percent, income disparity or its absence did not affect their feelings about fairness and trust—or their happiness—one way or the other.

Before this analysis, said Oishi, most studies measuring life satisfaction and income disparity have looked at the differences between nations or states.

The results have been mixed; some studies found equal nations and states are happier than unequal ones, while other studies did not find any relation. “People were puzzled,” Oishi said. 

“In addition, it was hard to interpret the previous findings as Brazil is different from Sweden, and Mississippi is different from Minnesota not only in income inequality but in many other factors” he said.

But this study eliminates the variables of geographic and cultural difference by looking at America over a long period of time. For the first time, psychologists can see a link between a major socioeconomic factor and the quality of people’s individual lives in a capitalistic environment.

The researchers caution that they show only correlations and not causation, and that other dynamics may have been at play in the respondents’ changing well-being.

Still, said Oishi, “the implications are clear: If we care about the happiness of most people, we need to do something about income inequality.” One way to accomplish that end, he said, is with more progressive taxation.

The study will be published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science.

Source: Association for Psychological Science

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