Income Inequality Affects the Psychological Health of Only the People Facing Scarcity

Abstract

Following the status-anxiety hypothesis, the psychological consequences of income inequality should be particularly severe for economically vulnerable individuals. Oddly, however, income inequality is often found to affect vulnerable low-income and advantaged high-income groups equally. We argue that economic vulnerability is better captured by a financial-scarcity measure and hypothesize that income inequality primarily impairs the psychological health of people facing scarcity. First, repeated cross-sectional international data (from the World Values Survey: 146,034 participants; 105 country waves) revealed that the within-country effect of national income inequality on feelings of unhappiness was limited to individuals facing scarcity (≈25% of the World Values Survey population). Second, longitudinal national data (Swiss Household Panel: 14,790 participants; 15,595 municipality years) revealed that the within-life-course effect of local income inequality on psychological health problems was also limited to these individuals (< 10% of the Swiss population). Income inequality by itself may not be a problem for psychological health but, rather, may be a catalyst for the consequences of financial scarcity.

The association between income inequality and adult mental health at the subnational level—a systematic review

“…Of 15 studies that were only partially supportive of the IIH, reasons for this included associations only being seen: in low-income participants or deprived wards [ 67 , 68 , 86 ], with respect to certain symptoms or presentations [ 70 , 71 , 75 , 81 , 85 ], prior to adjustment for covariates [ 84 , 88 , 89 ], in women [ 78 ], at the provincial but not county level [ 87 ], at a given time-lag [ 79 ]. Finally, one study found that inequality predicted variance in depression symptoms between but not within twin pairs [ 82 ].…”

“…In contrast, 33.33% (n = 14) of the studies were unsupportive of either hypothesis [95][96][97][98][99][100][101][102][103][104][105][106][107][108], three of which (21.43%) showed mixed findings [98,104,107] and the remaining 11 (78.57%) reporting only null findings. Of 15 studies that were only partially supportive of the IIH, reasons for this included associations only being seen: in low-income participants or deprived wards [67,68,86], with respect to certain symptoms or presentations [70,71,75,81,85], prior to adjustment for covariates [84,88,89], in women [78], at the provincial but not county level [87], at a given time-lag [79]. Finally, one study found that inequality predicted variance in depression symptoms between but not within twin pairs [82].…”

“…For these data, percentages of total studies (row total) are also presented in brackets. In the final two columns partially and wholly supportive data are collapsed for ease of interpretation (n = 10, 40%) [67,73,75,77,78,81,[85][86][87][88] compared with the MNH (n = 5, 20%) [90][91][92][93][94].…”

A Comprehensive Investigation of Associations of Objective and Subjective Socioeconomic Status with Perceived Health and Subjective Well-Being

“…Elgar et al, 2013) supported the psychosocial explanations linking subjective SES with health outcomes. Such comparative explanations take into consideration the effects of the macro contexts and propose that income inequalities in the society are likely to enhance feelings of relative deprivation and impair psychological health of those facing scarcity (Sommet, Morselli & Spini, 2018). The effects of income inequality in the society on individuals' perceptions of their personal and group-level wealth has been demonstrated with cross-sectional international data (with data from World Values Survey), longitudinal data (with data from Swiss Householf Panel; see Sommet et al, 2018) and experimentally (with samples from Spain, Australia, and USA; see Sanchez-Rodriguez et al, 2019).…”

Lacking socio‐economic status reduces subjective well‐being through perceptions of meta‐dehumanization

“…On the one hand, the impact on people's well-being has been studied by taking into consideration the material conditions or the objective SES (OSS) in which they live (Tay & Diener, 2011) which refers to the capability to cover their basic needs (i.e., food, shelter, heat). These material conditions are predictors of psychological well-being (Diener & Oishi, 2000), especially among those who face scarcity in unequal contexts (Sommet, Morselli, & Spini, 2018). On the other hand, well-being has been studied by using the relative conditions or the subjective SES (SSS; Adler, Epel, Castellazzo, & Ickovics, 2000) that lead people or groups to (up or down) social comparisons with other individuals or groups within their society.…”