Income Inequality, Life Satisfaction Inequality and Trust: A Cross Country Panel Analysis
Open accessAbstract
Literature has argued that income inequality crowds out trust. However, whether income inequality makes people less trusting depends on how they perceive income inequality within their personal social context and social cognition. In this paper we therefore conjecture that the relationship of income inequality to trust depends on how income inequality affects inequality of life satisfaction. If life satisfaction inequality is high, distrust is generated among the least happy. This will increase polarization and the risk of rebellion, thereby also affecting trust among the happier people. Thus, life satisfaction inequality may be an essential factor in the relationship between income inequality and trust. In previous literature, the potential mediating role of life satisfaction inequality in the relationship between income inequality and social trust has not yet received attention. We test our model by panel analysis on 25 OECD countries in the period 1990–2014. The panel analysis shows that income inequality increases life satisfaction inequality and that both income inequality and life satisfaction inequality have a significant negative impact on social trust. Mediation tests show complementary mediation: besides the direct negative effect of income inequality on trust, we find an indirect effect mediated by life satisfaction inequality. This indirect effect counts for 20% of the total effect of income inequality on trust. Our results imply that policy options for increasing trust are not limited to countering income inequality, but can also include policy measures that directly reduce inequality of life satisfaction.
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When individuals feel miserable and perceive that things cannot get any worse for them, they rebel.
“When individuals feel miserable and perceive that things cannot get any worse for them, they rebel (Graafland & Lous, 2019).”
From Risk, Trust, and the Roles of Human Versus Virtual Influencers (2024) · cites this paper as Graafland & Lous, 2019
Section 3.1 says individuals rebel only if they feel miserable and believe things cannot get worse. That makes those feelings a prerequisite, whereas the citing sentence says they lead to rebellion. The same passage describes oppressed people as likely to support rebellion, not certain to rebel. (LLM, conf=0.84)
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- Authors
- Graafland, J., & Lous, B.
- Affiliations
- Tilburg University (NL)
- Corresponding author
- Graafland, Johan
- ORCID
- Graafland, Johan
- Venue
- Journal of Happiness Studies
- Published
- 2018-08-25
- Volume
- 20
- Issue
- 6
- Pages
- 1717-1737
- ISSN
- 1389-4978 (ISSN-L)
- 1573-7780
- OpenAlex
- W2888367373
- Cited by
- 95
- References
- 83
- Citations by year
- 2026: 5 · 2025: 13 · 2024: 14 · 2023: 17 · 2022: 21 · 2021: 18 · 2020: 5 · 2019: 2
- FWCI
- 14.22
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Licence
- Locations
- Journal of Happiness Studies (publishedVersion, cc-by)
- Research portal (Tilburg University) (publishedVersion, other-oa)
- Data Archiving and Networked Services (DANS) (submittedVersion, other-oa)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- John Templeton Foundation
- Topics
- Social Sciences › Sociology and Political Science › Income, Poverty, and Inequality
- Social Sciences › Health › Health disparities and outcomes
- Social Sciences › Psychology › Social Psychology › Psychological Well-being and Life Satisfaction
- Keywords
- income inequality, social trust, trust, mediation, OECD countries, social polarization
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