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Feeling miserable these days? You may be able to blame the 1%.
As the share of income held by the super rich (those in the top 1% of the income distribution) increases, the life satisfaction of the rest of us decreases, according to the “Top Incomes and Human Well-being Around the World” study released on Dec. 28th.
“Our 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,” said co-author Jan-Emmanuel De Neve, an associate professor in economics and strategy at the University of Oxford, in a statement released Tuesday.
The study used data from the Gallup World Poll and the World Top Incomes Database to plot the share of taxable income by the so-called 1% as compared to reported levels of life satisfaction and positive and negative emotional well-being.
Furthermore, in general, in societies where the 1% holds a larger share of the wealth, citizens report feeling more negative emotions than in those where income is more evenly distributed.
These findings come at a same time that income inequality has been rising in many countries. “In advanced economies, the gap between the rich and poor is at its highest level in decades,” according to research published by the International Monetary Fund last year.
In America, for example, the total share of income earned by the top 1% of families was less than 10% in the late 1970s; by 2012, it had reached levels not seen since the Great Depression, with more than 20% of the income owned by the top 1%, according to research from Emmanuel Saez, an economics professors at the University of California at Berkeley. (In fact, America’s 20 wealthiest people — a group that could fit in one Gulfstream G650 jet — have more wealth than the 152 million people who make up the least wealthy 50% of U.S. households.)
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The reason we become less happy as income inequality rises may be that as rich people get richer, they “extend the range of the income distribution,” which means that even reasonably well-off people can no longer afford certain things like private school or homes in the best neighborhoods, the researchers write in a post published Tuesday on Harvard Business Review.
Furthermore, “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,” they conclude.
This study does not prove causation; it simply shows that there is a strong correlation between rising income inequality and lowered life satisfaction and increased negative emotions. Plus, it did not look at this relationship in all countries, as data on that was not available.
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