Income inequality and subjective wellbeing: Panel data evidence from China

Abstract

Using four waves of longitudinal data from the China Family Panel Studies (CFPS), we examine the effects of income inequality on subjective wellbeing (SWB). We take a dual approach in measuring income inequality, and thus, we examine the effects of inequality using province-level Gini coefficient as well as between-group inequality or identity-related inequality defined as the income gap between migrants without urban household registration identity (hukou) and urban residents. We find negative effects of both province-level income inequality and between-group income inequality on SWB, measured by life satisfaction. Our results also show that the effects of income inequality on SWB is stronger for rural hukou residents compared to urban hukou residents. These findings are robust to alternative ways of measuring SWB and income inequality. In addition, we find evidence suggesting that neighbourhood trust is an important channel through which income inequality operates to reduce SWB. We suggest policies that promote trust in communities with high inequality with a view of addressing the negative effects of inequality on SWB.

Openness, rural-urban inequality, and happiness in China

“…As for the specific effects associated with the controls, our results are generally consistent with the prior studies (e.g., Han and Gao, 2019 ; Huang, 2019 ; Morgan and Wang, 2019 ; Tran et al, 2018 ; Yang et al, 2019 ; Zhang and Churchill, 2020 ). For example, the result supports a U-shaped age-happiness curve, with the lowest point at about forty years old, for middle-aged people suffering from economic pressure and career ceilings.…”

“…In addition to the main variables of interest mentioned above, in line with the previous literature (e.g., Han and Gao, 2019 ; Huang, 2019 ; Morgan and Wang, 2019 ; Tran et al, 2018 ; Wen et al, 2019 ; Yang et al, 2019 ; Zhang and Churchill, 2020 ), we also include a set of individual characteristics that may affect happiness. Specifically, in our regressions we control for age, income level, gender, ethnicity, education, political status, religious belief, marital status, health, and social status.…”

The Impact of Income Inequality on Carbon Emissions in China: A Household-Level Analysis

“…Therefore, to avoid the regression bias caused by the endogenous problems, this paper develops an instrumental variable strategy. Given that there is no appropriate external instrument we can find from CFPS, following Zhang et al (2020), we adopt the Lewbel (2012) two-stage least square approach, which exploits heteroscedasticity for identification [60,75]. In the first stage, we run regressions of Gini on a vector of exogenous variables Z i , which can be a subset of the vector of control variables in Model (4), and then retrieve the vector of residualsε.…”

“…We find that the residential use, food, education, culture and recreation services are the first three categories in inducing carbon emissions, and the residential use produces most of the total emissions with a proportion of 53.88% in 2010, 53.93% in 2012, and 77.68% in 2014. A great deal of literature documents that different consumption patterns of households in different income levels cause a positive/negative impact of income equality on household carbon emissions [60]. Therefore, we further aggregate the households in the CFPS into five groups according to the principle of classification of the NBS and calculate the carbon emissions of different income groups by category.…”

The Effects of Sport Activities and Environmentally Sustainable Behaviors on Subjective Well-Being: A Comparison Before and During COVID-19

“…The literature shows that current SWB is driven by individuals' subjective perception and depends on many factors. For example, SWB is related to specific employment factors such as income (Stevenson and Wolfers, 2008 ; Zhang and Churchill, 2020 ) or unemployment (Helliwell and Huang, 2014 ). In addition, associations of SWB with various psychological factors were found, such as depression (Fergusson et al, 2015 ), personality traits (DeNeve and Cooper, 1998 ; Steel et al, 2008 ), goals (Klug and Maier, 2015 ), prosocial behavior (Thoits and Hewitt, 2001 ; Dunn et al, 2008 ), and job satisfaction (Bowling et al, 2010 ).…”