A new study reveals that as the rich get even richer, the well-being of everyone else takes an emotional hit.
You’re probably familiar with the old adage “The rich get richer, and the poor get poorer.” But maybe it should be revised to read: “The rich get richer, and everybody else gets less happy.”
That was the finding of a recent study titled “Top Incomes and Human Well-Being Around the World,” conducted by researchers from the University of Oxford’s Saïd Business School.
Income inequality, which has been climbing steadily across the globe for the past three decades, was identified as the top threat to global stability by the World Economic Forum in 2015. This new research reveals that the rising income gap is having a negative impact on people’s sense of satisfaction and daily emotional experiences.
The study, which is based on data from the Gallup World Poll and the World Top Incomes Database, found that the higher the share of income held by the super-rich — or the top 1 percent — the lower the well-being felt by everyone else.
In countries where income inequality is high – such as the United States, South Africa and Colombia – citizens report feeling more negative emotions than in countries where the income gap is smaller.
The study found that rising income inequality, specifically a 1 percent increase in the share of taxable income held by the top 1 percent, is as harmful to a country’s overall well-being as a 1.4 percent rise in the nation’s unemployment.
“[O]ur research shows that, worldwide, income inequality at the very top makes us all less happy with our lives, even if we’re relatively well-off,” study co-author Jan-Emmanuel De Neve, an associate professor in economics and strategy at the University of Oxford, said in a statement.
Why does this occur? The researchers try to answer that question in a report about their findings posted on the Harvard Business Review:
As the very rich get richer, they extend the range of the income distribution. In a practical sense, that means even if you are a member of the relatively well-to-do middle class, some things start getting priced beyond your reach, such as private schools and houses in the best neighborhoods. There might also be a psychological reason for the effect: an increase in the share of income held by the richest 1% can make you feel as if your chance of moving up the ladder and becoming very rich yourself is growing increasingly beyond your reach.
To find out where income disparity is the widest, read “Countries With the Widest Gap Between Rich and Poor.” Find out if you live in one of the “Areas With the Worst Income Inequality in the U.S.”
What do you think of the study findings? Do you think the growing income inequality makes you feel less happy in your own life? Share your comments below or on our Facebook page.