Inequality affects how you see those around you and your level of happiness. People in less equal societies are less likely to trust each other, less likely to engage in social or civic participation, and less likely to say they’re happy.

Engagement with Politics and Society

Income inequality changes the way people interact with other members of their society and engage in society itself. Key findings from the research include:

• People in European countries with higher levels of inequality are less likely to help each other in acts of altruism.¹
• Unequal societies have lower rates of both social and civic participation (including lower engagement with poltical parties).²
• Higher rates of income inequality are linked to lower levels of voter turnout.³
• Inequality is linked to lower levels of cultural activity.⁴

Trust

There is a substantial and robust body of research suggesting that countries with higher levels of inequality have lower levels of trust. This lack of trust is associated with a variety of other social issues including happiness, homicides and health. Key findings from research include:

Increased inequality in a nation leads to lower levels of trust.⁵

• This lack of trust is closely linked to higher homicide rates and worse health.⁶

Mechanism

Income inequality increases the social distance between you and other members of your society which makes you believe that they are different from you. This makes you less likely to trust them and to build relationships with them.⁷ Low levels of trust and a lack of social capital prevent strong relationships forming. This lack of strong relationships with others in society makes homicide more likely and prevents the sort of support networks which help improve a person’s health.⁸  This has implications for other social impacts of inequality, discussed below.

​Personality and Attitudes

Income inequality affects people’s personalities and how they perceive themselves and others.

Key findings from the research include:

• People in less equal countries are less likely to believe that most people can be trusted, have less interest in politics, less confidence in their parliament, are more likely to believe that there needs to be more respect for authority, more likely to think that children should be obedient and less likely to believe that children should be independent.⁹
• People in countries with high levels of inequality are more likely to believe that those at the top of their society are competent and those at the bottom are not but have warmer attitudes to those at the bottom than the top. More unequal societies are also more likely to believe that competition between groups leads to competent outcomes.¹⁰
• Research has suggested that people in less equal societies have different personalities. A study found that people in less equal US states were on average less agreeable and less likely to be empathetic, trust people, cooperate or be altruistic.¹¹

Happiness

Research suggests that inequality is linked to lower levels of happiness.¹² This thesis, however, is not conclusive: there is research which disputes the relationship between inequality and happiness, and research which suggests that the link (between happiness and inequality) occurs because of the relationship between trust and inequality. Key findings from research include:

• Higher levels of inequality are associated with lower levels of wellbeing and life satisfaction in western developed nations that were not formerly communist countries.¹³ (Developing nations and formerly communist countries have other more complicated relationships between happiness and inequality. These countries have at some points in their histories seen happiness increase with inequality and then later happiness decrease as inequality increased.)¹⁴
• Research has found that wellbeing and inequality are only weakly linked.  It is suggested that there are stronger links between trust and inequality cross-nationally and that the link between wellbeing and trust is more important in certain groups.¹⁵

Criticism and Issues

Some studies have suggested that inequality actually increases wellbeing.¹⁶

Mechanism

There is a large body of evidence suggesting people have a natural aversion to inequality. A dislike of inequality has been demonstrated in children as young as three.¹⁷

1. (Paskov and Dewilde 2012) ↩︎
2. (Lancee and Werfhorst 2012) ↩︎
3. (Geys 2006) (Solt 2008) (Solt 2010) ↩︎
4.  (Szlendak and Karwacki 2012)  ↩︎
5. (Jordahl 2007) ↩︎
6. (Elgar 2010) (Elgar and Aitken 2011) ↩︎
7. (Paskov and Dewilde 2012) ↩︎
8. (Elgar 2010) (Elgar and Aitken 2011) ↩︎
9. (Pryor 2012) ↩︎
10. (Durante, et al. 2012) ↩︎
11. (de Vries, Gosling and Potter 2011) ↩︎
12. There is a large quantity of literature on the different ways that wellbeing and happiness are measured. There is strong evidence that the methods used are reliable and relate to actual phenomenon. For more information see Inequality and Happiness by Praag, B and Frrer-i-Carbonell, A; in Oxford Handbook of Economic Inequality ↩︎
13. (Ferrer-i-Carbonell and Ramos 2012) (Ferrer-i-Carbonell and Ramos 2010) ↩︎
14. (Grosfeld and Senik 2010) ↩︎
15. (Oishi, Kesebir and Diener 2011) ↩︎
16. (Sanfey and Teksoz 2007) ↩︎
17. (Lobue, et al. 2011) ↩︎