Income inequality is detrimental to long-term well-being: A large-scale longitudinal investigation in China

Abstract

Background: Much of the research on the detrimental effects of inequality on well-being is based on cross-sectional surveys, which may have over- or under-estimated the relationship between income inequality and well-being. Moreover, the vast majority of the work comes from Western industrialized contexts but it is not known to what extent the same pattern holds in non-Western developing countries. Objective: The current research aims to address these two issues by investigating the longitudinal effects of income inequality on well-being in China. Method: We used the China Family Panel Studies dataset in 2010–2014. Our study includes a representative sample of 29,331 residents from 20 provinces in China. The participants completed measures of well-being, including subjective well-being and psychological distress. We examined whether provincial-level income inequality in 2010 predicted individual-level well-being in 2014. Results: Multilevel analyses showed that residents in more unequal provinces had lower subjective well-being and greater psychological distress. The patterns still held, after controlling for baseline well-being and a number of covariates, including age, gender, education, income, ethnicity, marital status, and urban/rural residence. The effects of inequality on well-being differed across socioeconomic groups. Conclusion: Findings suggest that income inequality has long-term adverse consequences on well-being in a non-Western developing society. Furthermore, its effects are moderated by financial wealth.