Inequality and Social Exclusion in Europe: Do Rich Elites Lower the Quality of Life?

• In Event: 1166 - Cross-National Sociology

Abstract

If one were poor, which country would be a better place to live? Where there is a very rich elite, would one suffer from relative deprivation, envy, and institutional distortions letting the upper classes translate their economic success into political power and unmerited wealth? In a more egalitarian country, would one benefit from mechanical solidarity – being more like one's fellow citizens and hence more accepted and better treated by them? "Yes" has been the received wisdom. However, recently, challenges using better data and better methods raise doubts. Yet, the evidence supporting this paradigm shift, that income inequality does not impair subjective wellbeing of the citizenry at large or of the poor in particular, virtually all rests on one measure of inequality, the Gini coefficient, and most of it rests on the WVS/EVS dataset or the Gallup World Poll, although both have weak measures of income at the individual level. To address this important substantive issue and quash doubts about whether the emerging consensus is robust to alternative measures of elite income advantage, we analyze the EQoL surveys (2003-2012) of representative samples from 29 European countries with 70,000 individual respondents, a high-quality measure of family income, and appropriate individual-level controls. We measure elite advantage as the top 10% in each country: Does that, net of other influences, impact individuals' subjective wellbeing? Our variance-components multi-level models reveal that inequality in the straightforward sense of a rich elite does not reduce poor people's happiness. These results undermine relative deprivation and simple materialist arguments. Instead they support a "civilized materialist" hypothesis: In societies where elite incomes are higher – and the gap between rich and poor therefore greater, all else equal – poor people (and everyone else) are on average happier.Moreover, such societies are more attractive to migrants.

Authors

• Jonathan Kelley, University of Nevada-Reno

• M.D.R. Evans, University of Nevada-Reno