Happiness and equality: the missing link

Source: Inequality.org

Milestone study carried out in the United States shows that if economic growth is not equally distributed, people will never grow happier.

US citizens have on average rated themselves happier, over the past four decades, ‘at times of relative income equality.’ This is one of the main conclusions of a study led by three psychologists — Shigehiro Oishi and Selin Kesebir from the University of Virginia and Ed Diener from the University of Illinois — titled “Income Inequality and Happiness” and published in the prestigious journal Psychological Science.

Another main conclusion of the repost is that Americans have not become happier over the past 50 years because they have become more unequal. America’s average household wealth has doubled since 1962. However, as the General Social Survey data from 1972 to 2008 shows, over recent decades Americans on average have become less trusting and less convinced they live in a fair society. And this mistrust and sense of unfairness matches up significantly with levels of inequality.

“Americans were on average happier in the years with less income inequality than in the years with more income inequality [while] the inverse relation between income inequality and happiness was explained by perceived fairness and general trust. That is, Americans trusted others less and perceived others to be less fair in the years with more income inequality than in the years with less income inequality”.

It should be noted that the negative association between income inequality and happiness “held for lower income respondents, but not for upper-middle and the highest income groups. The richest 20 percent of Americans show no linkage here: more affluent Americans also do not show less happiness in those years when income inequality increases. In this sense, the report finds that the lower-income people “perceive the world to be unfair if only the rich get richer,” and this “greater income disparity,” in turn, will “disjoint and divide” their communities, leaving lower-income people less trusting of others”.

Income and trust

The report found that “the negative link between income inequality and the happiness of lower income respondents was explained not by lower household income, but by perceived unfairness and lack of trust. Lower-income people is not less happy simply because their household incomes are falling in years of growing inequality; the researchers found that “lowered levels of perceived fairness and trust,” not reduced income, turned out to be the factors “that made low-income Americans feel less happy in the years with greater income inequality.”

According to Oishi, Kesebir and Diener the “psychological mechanisms” that could “account for the link between societal income inequality and individual-level happiness lies in people’s sense of trust and fairness.

“Americans,” stresses the report, “perceived others to be less fair and trustworthy in the years with greater income disparity”, and they are happier “when national wealth is distributed more evenly than when it is distributed unevenly”, says the study.