Does National Income Inequality Affect Individuals' Quality of Life in Europe? Inequality, Happiness, Finances, and Health

• Published in: Social indicators research Vol. 117; no. 3; pp. 1089 - 1110
• Main Authors: Zagorski, Krzysztof, Evans, Mariah D. R., Kelley, Jonathan, Piotrowska, Katarzyna
• Format: Journal Article
• Language: English
• Published: Dordrecht Springer 01.07.2014; Springer Netherlands; Springer Nature B.V
• Subjects: Developed Nations; Economic Development; Economic sociology; Europe; GDP; Gross Domestic Product; Happiness; Health; Health Care Services; History, theory and methodology; Human Geography; Hypotheses; Illiteracy; Income; Income Inequality; Industrialized nations; Inequality; Laborers; Life Satisfaction; Mental Disorders; Methodology; Microeconomics; Modeling; Multilevel models; Obesity; Per capita; Poverty; Public Health; Quality of Life; Quality of Life Research; Research Problems; Skilled workers; Social Mobility; Social research; Social Sciences; Socioeconomics; Sociology; Sociology of economy and development; Standard of living; Standard of living. Income; Statistical analysis; Studies; Trust (Psychology); Variables; Well Being; Wellbeing; White Collar Occupations; Europe; Subjective well-being; Happiness; Health; Income; Economic development; Inequality; Quality of life; Individual; Economic Development; Economic inequality; Quality of Life; Psychological well-being; National Income
• ISSN: 0303-8300; 1573-0921
• DOI: 10.1007/s11205-013-0390-z

This paper analyses the effect of income inequality on Europeans' quality of life, specifically on their overall well-being (happiness, life satisfaction), on their financial quality of life (satisfaction with standard of living, affordability of goods and services, subjective poverty), and on their health (self-rated health, satisfaction with health). The simple bivariate correlations of inequality with overall well-being, financial quality of life, and health are negative. But this is misleading because of the confounding effect of a key omitted variable, national economic development (GDP per capita): Unequal societies are on average much poorer (r = 0.46) and so disadvantaged because of that. We analyse the multi-level European Quality of Life survey conducted in 2003 including national-level data on inequality (Gini coefficient) and economic development (GDP) and individual-level data on overall well-being, financial quality of life, and health. The individual cases are from representative samples of 28 European countries. Our variance-components multi-level models controlling for known individual-level predictors show that national per capita GDP increases subjective well-being, financial quality of life, and health. Net of that, the national level of inequality, as measured by the Gini coefficient, has no statistically significant effect, suggesting that income inequality does not reduce well-being, financial quality of life, or health in advanced societies. These result all imply that directing policies and resources towards inequality reduction is unlikely to benefit the general public in advanced societies.