IDEAS home Printed from https://ideas.repec.org/a/spr/jhappi/v20y2019i1d10.1007_s10902-017-9917-3.html
   My bibliography  Save this article

Rising Income Inequality During the Great Recession Had No Impact on Subjective Wellbeing in Europe, 2003–2012

Author

Listed:
  • M. D. R. Evans

    (University of Nevada)

  • Jonathan Kelley

    (University of Nevada
    International Survey Center)

  • S. M. C. Kelley

    (University of California, Berkeley
    American Institutes for Research)

  • C. G. E. Kelley

    (American Institutes for Research)

Abstract

The Great Recession increased income inequality by an average of 6%. We assesses the impact of that on subjective wellbeing (happiness, life satisfaction). Data: European Quality of Life survey, 25 representative national samples at three time points, over 70,000 respondents. Analysis: variance-components multi-level models controlling for GDP per capita (an essential point) and individual-level predictors. Findings: income inequality has no statistically significant impact before, during, or after the Great Recession. Instead (contrary to much previous research) a straightforward individualistic utilitarian–materialist understanding is supported: money does increase wellbeing but inequality itself—the gap between rich and poor—is irrelevant.

Suggested Citation

  • M. D. R. Evans & Jonathan Kelley & S. M. C. Kelley & C. G. E. Kelley, 2019. "Rising Income Inequality During the Great Recession Had No Impact on Subjective Wellbeing in Europe, 2003–2012," Journal of Happiness Studies, Springer, vol. 20(1), pages 203-228, January.
    • Handle: RePEc:spr:jhappi:v:20:y:2019:i:1:d:10.1007_s10902-017-9917-3
    DOI: 10.1007/s10902-017-9917-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10902-017-9917-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10902-017-9917-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bernard Praag, 2011. "Well-being inequality and reference groups: an agenda for new research," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(1), pages 111-127, March.
    2. Daniel W. Sacks & Betsey Stevenson & Justin Wolfers, 2010. "Subjective Well-Being, Income, Economic Development and Growth," NBER Working Papers 16441, National Bureau of Economic Research, Inc.
    3. Angus Deaton, 2008. "Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 53-72, Spring.
    4. Bruce Headey & Ruud Muffels & Gert Wagner, 2013. "Choices Which Change Life Satisfaction: Similar Results for Australia, Britain and Germany," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 112(3), pages 725-748, July.
    5. Bruce Headey & Jonathan Kelley & Alex Wearing, 1993. "Dimensions of mental health: Life satisfaction, positive affect, anxiety and depression," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 29(1), pages 63-82, May.
    6. Paolo Verme, 2011. "Life Satisfaction And Income Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57(1), pages 111-127, March.
    7. Simone Schneider, 2012. "Income Inequality and its Consequences for Life Satisfaction: What Role do Social Cognitions Play?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 106(3), pages 419-438, May.
    8. AndrewE. Clark & Claudia Senik, 2010. "Who Compares to Whom? The Anatomy of Income Comparisons in Europe," Economic Journal, Royal Economic Society, vol. 120(544), pages 573-594, May.
    9. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    10. Ruut Veenhoven & Michael Hagerty, 2006. "Rising Happiness in Nations 1946–2004: A Reply to Easterlin," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 79(3), pages 421-436, December.
    11. Bobak, Martin & Pikhart, Hynek & Rose, Richard & Hertzman, Clyde & Marmot, Michael, 2000. "Socioeconomic factors, material inequalities, and perceived control in self-rated health: cross-sectional data from seven post-communist countries," Social Science & Medicine, Elsevier, vol. 51(9), pages 1343-1350, November.
    12. Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 1-102.
    13. Ed Diener & Eunkook Suh, 1997. "Measuring Quality Of Life: Economic, Social, And Subjective Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 40(1), pages 189-216, January.
    14. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
    15. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
    16. Richard Easterlin, 2005. "Feeding the Illusion of Growth and Happiness: A Reply to Hagerty and Veenhoven," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 74(3), pages 429-443, December.
    17. Jee-Seon Kim & Edward Frees, 2007. "Multilevel Modeling with Correlated Effects," Psychometrika, Springer;The Psychometric Society, vol. 72(4), pages 505-533, December.
    18. Bentham, Jeremy, 1781. "An Introduction to the Principles of Morals and Legislation," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number bentham1781.
    19. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2007. "Governance Matters VI: Aggregate and Individual Governance Indicators, 1996-2006," Policy Research Working Paper Series 4280, The World Bank.
    20. Michael Hagerty & Ruut Veenhoven, 2003. "Wealth and Happiness Revisited – Growing National Income Does Go with Greater Happiness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 64(1), pages 1-27, October.
    21. Krzysztof Zagórski, 2011. "Income and Happiness in Time of Post-Communist Modernization," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 104(2), pages 331-349, November.
    22. Christian Welzel & Ronald Inglehart, 2010. "Agency, Values, and Well-Being: A Human Development Model," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 97(1), pages 43-63, May.
    23. Krzysztof Zagorski & Mariah Evans & Jonathan Kelley & Katarzyna Piotrowska, 2014. "Does National Income Inequality Affect Individuals’ Quality of Life in Europe? Inequality, Happiness, Finances, and Health," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(3), pages 1089-1110, July.
    24. Jesper Rözer & Gerbert Kraaykamp, 2013. "Income Inequality and Subjective Well-being: A Cross-National Study on the Conditional Effects of Individual and National Characteristics," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 113(3), pages 1009-1023, September.
    25. Jonathan Kelley & M. D. R. Evans & Jennifer Lowman & Valerie Lykes, 2017. "Group-mean-centering independent variables in multi-level models is dangerous," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(1), pages 261-283, January.
    26. Carol Graham & Andrew Felton, 2006. "Inequality and happiness: Insights from Latin America," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(1), pages 107-122, April.
    27. Takashi Oshio & Miki Kobayashi, 2011. "Area-Level Income Inequality and Individual Happiness: Evidence from Japan," Journal of Happiness Studies, Springer, vol. 12(4), pages 633-649, August.
    28. Krzysztof Zagorski & Mariah Evans & Jonathan Kelley & Katarzyna Piotrowska, 2014. "Erratum to: Does National Income Inequality Affect Individuals’ Quality of Life in Europe? Inequality, Happiness, Finances, and Health," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 118(2), pages 939-939, September.
    29. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    30. Mariano Rojas & Ruut Veenhoven, 2013. "Contentment and Affect in the Estimation of Happiness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(2), pages 415-431, January.
    31. F. L. Jones & Jonathan Kelley, 1984. "Decomposing Differences between Groups," Sociological Methods & Research, , vol. 12(3), pages 323-343, February.
    32. Seidl, Christian & Traub, Stefan & Morone, Andrea, 2003. "Relative Deprivation, Personal Income Satisfaction, and Average Well-Being under Different Income Distributions," Economics Working Papers 2003-05, Christian-Albrechts-University of Kiel, Department of Economics.
    33. Radcliff, Benjamin, 2001. "Politics, Markets, and Life Satisfaction: The Political Economy of Human Happiness," American Political Science Review, Cambridge University Press, vol. 95(4), pages 939-952, December.
    34. Babones, Salvatore J., 2008. "Income inequality and population health: Correlation and causality," Social Science & Medicine, Elsevier, vol. 66(7), pages 1614-1626, April.
    35. Jonathan A. Schwabish & Timothy M. Smeeding & Lars Osberg, 2006. "Income Distribution and Social Expenditures," Palgrave Macmillan Books, in: Dimitri B. Papadimitriou (ed.), The Distributional Effects of Government Spending and Taxation, chapter 9, pages 247-288, Palgrave Macmillan.
    36. Emmanuel Saez, 2012. "Striking it Richer: The Evolution of Top Incomes in the United States (Updated with 2009 and 2010 estimates)," Technical Notes 201202, World Inequality Lab.
    37. Ng, Yew-Kwang, 1997. "A Case for Happiness, Cardinalism, and Interpersonal Comparability," Economic Journal, Royal Economic Society, vol. 107(445), pages 1848-1858, November.
    38. Macunovich, Diane J., 2011. "A Note on Inequality Aversion Across Countries, Using Two New Measures," IZA Discussion Papers 5734, Institute of Labor Economics (IZA).
    39. Ed Diener & Ronald Inglehart & Louis Tay, 2013. "Theory and Validity of Life Satisfaction Scales," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 112(3), pages 497-527, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Weerakkody, Vishanth & Sivarajah, Uthayasankar & Mahroof, Kamran & Maruyama, Takao & Lu, Shan, 2021. "Influencing subjective well-being for business and sustainable development using big data and predictive regression analysis," Journal of Business Research, Elsevier, vol. 131(C), pages 520-538.
    2. Sarah Kelley & M. D. R. Evans & Jonathan Kelley, 2023. "Happily Distant or Bitter Medicine? The Impact of Social Distancing Preferences, Behavior, and Emotional Costs on Subjective Wellbeing During the Epidemic," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 18(1), pages 115-162, February.
    3. M. D. R. Evans & Jonathan Kelley & C. G. E. Kelley & S. M. C. Kelley, 2020. "Income Inequality in the Great Recession did not Harm Subjective Health in Europe, 2003–2012," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 15(5), pages 1451-1473, November.
    4. Encarnación Álvarez-Verdejo & Pablo J. Moya-Fernández & Juan F. Muñoz-Rosas, 2021. "Single Imputation Methods and Confidence Intervals for the Gini Index," Mathematics, MDPI, vol. 9(24), pages 1-20, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Krzysztof Zagorski & Mariah Evans & Jonathan Kelley & Katarzyna Piotrowska, 2014. "Does National Income Inequality Affect Individuals’ Quality of Life in Europe? Inequality, Happiness, Finances, and Health," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(3), pages 1089-1110, July.
    2. Olivia S. Jin & Phanindra V. Wunnava, 2023. "“Feeling richer and happier? The effect of self-perceived economic welfare on life satisfaction: longitudinal evidence from a transition economy”," SN Business & Economics, Springer, vol. 3(3), pages 1-19, March.
    3. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    4. Martin Schröder, 2018. "Income Inequality and Life Satisfaction: Unrelated Between Countries, Associated Within Countries Over Time," Journal of Happiness Studies, Springer, vol. 19(4), pages 1021-1043, April.
    5. Johan Graafland & Bjorn Lous, 2019. "Income Inequality, Life Satisfaction Inequality and Trust: A Cross Country Panel Analysis," Journal of Happiness Studies, Springer, vol. 20(6), pages 1717-1737, August.
    6. Ozan Eksi & Neslihan Kaya, 2017. "Life Satisfaction and Keeping Up with Other Countries," Journal of Happiness Studies, Springer, vol. 18(1), pages 199-228, February.
    7. M. D. R. Evans & Jonathan Kelley & C. G. E. Kelley & S. M. C. Kelley, 2020. "Income Inequality in the Great Recession did not Harm Subjective Health in Europe, 2003–2012," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 15(5), pages 1451-1473, November.
    8. Yasar, Rusen, 2017. "Subjective well-being and income: A compromise between Easterlin paradox and its critiques," Economics Discussion Papers 2017-113, Kiel Institute for the World Economy (IfW Kiel).
    9. Liisa-Maria Palomäki, 2017. "Reference Groups and Pensioners’ Subjective Economic Well-Being in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 131(2), pages 509-525, March.
    10. Yasar, Rusen, 2018. "Subjective well-being and income: A compromise between Easterlin paradox and its critiques," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 12, pages 1-23.
    11. T. Lakshmanasamy & K. Maya, 2020. "The Effect of Income Inequality on Happiness Inequality in India: A Recentered Influence Function Regression Estimation and Life Satisfaction Inequality Decomposition," Indian Journal of Human Development, , vol. 14(2), pages 161-181, August.
    12. Blanchflower, David G; Oswald, Andrew, 2011. "International Happiness," CAGE Online Working Paper Series 39, Competitive Advantage in the Global Economy (CAGE).
    13. Johan Graafland & Bjorn Lous, 2018. "Economic Freedom, Income Inequality and Life Satisfaction in OECD Countries," Journal of Happiness Studies, Springer, vol. 19(7), pages 2071-2093, October.
    14. Woo Chang Kang & Jae Seung Lee & BK Song, 2020. "Envy and Pride: How Economic Inequality Deepens Happiness Inequality in South Korea," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(2), pages 617-637, July.
    15. Ángeles Sánchez-Domínguez & Maria J. Ruiz Martos, 2016. "Europe 2020 Strategy Under the Scope of Life Satisfaction," ThE Papers 16/01, Department of Economic Theory and Economic History of the University of Granada..
    16. Long Yang & Haiyang Lu & Meng Li, 2023. "Multidimensional Inequality and Subjective Well-Being in China: A Generalized Ordered Logit Model Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(3), pages 1021-1052, February.
    17. Mariangela Bonasia & Oreste Napolitano & Nicola Spagnolo, 2018. "Happy PIIGS?," Journal of Happiness Studies, Springer, vol. 19(6), pages 1763-1782, August.
    18. Tobias Pfaff & Johannes Hirata, 2013. "Testing the Easterlin Hypothesis with Panel Data: The Dynamic Relationship between Life Satisfaction and Economic Growth in Germany and the UK," SOEPpapers on Multidisciplinary Panel Data Research 554, DIW Berlin, The German Socio-Economic Panel (SOEP).
    19. Pfaff, Tobias & Hirata, Johannes, 2013. "Testing the Easterlin hypothesis with panel data: The dynamic relationship between life satisfaction and economic growth in Germany and in the UK," CIW Discussion Papers 4/2013, University of Münster, Center for Interdisciplinary Economics (CIW).
    20. Tuyen Quang Tran & Cuong Viet Nguyen & Huong Vu, 2018. "Does Economic Inequality Affect the Quality of Life of Older People in Rural Vietnam?," Journal of Happiness Studies, Springer, vol. 19(3), pages 781-799, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jhappi:v:20:y:2019:i:1:d:10.1007_s10902-017-9917-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.