What predicts perceived economic inequality? The roles of actual inequality, system justification, and fairness considerations

Abstract

Past studies have mostly focused on investigating actual economic inequality with less work devoted to understanding perceived economic inequality and its antecedents. However, numerous studies have shown that perceived inequality is a strong predictor of psychological, political, and social outcomes and hence is an important outcome in and of itself. This paper aims to identify the socioecological (i.e., actual inequality) and psychological (legitimation and fairness considerations) antecedents of perceived economic inequality. We hypothesized that individuals who legitimized income inequality would perceive less inequality, whereas individuals who experienced unfairness engendered by income inequality would perceive more inequality. We utilized a nationally representative sample in China (N = 33,600 respondents nested within 25 provinces) and conducted multilevel longitudinal analyses to test our hypotheses. In line with our predictions, we found that legitimation of inequality was associated with less perceived inequality six years later, whereas unfairness was associated with more perceived inequality six years later. In addition, we found that in more unequal areas, people perceived less income inequality. These longitudinal effects were robust when controlling for prior years of perceived inequality, economic development, and sociodemographic factors. Findings have implications for system justification and economic inequality theories.