Power Distance Moderates the Relation Between Income Inequality and Life Satisfaction: A Cross-Country Longitudinal Analysis

Abstract

Despite extensive research, the relationship between income inequality and life satisfaction remains unclear, with some countries experiencing negative consequences, while others show neutral or positive outcomes. Using data from the Gallup World Poll (2006–2022) with nearly two million respondents from more than 110 countries, we disentangle the distinct within-country and between-country effects of inequality. Our multilevel analyses reveal a significant within-country effect: Temporal increases in inequality are associated with decreases in life satisfaction. At the between-country level, power distance—a cultural dimension reflecting tolerance for social disparities—moderates the relationship. In low power distance countries, higher inequality strongly predicts lower life satisfaction, whereas in high power distance countries, the effect is nonsignificant. These findings are robust across two measures of income inequality and controls for wealth and individualism, offering a refined methodological and cultural interpretation to resolve inconsistencies in prior cross-national research.

Keywords

power distance income inequality economic inequality hybrid regressions life satisfaction Gallup World Poll

Get full access to this article

View all access options for this article.

References

Akaliyski

Welzel

Bond

M. H.

Minkov

(2021). On “nationology”: The gravitational field of national culture. Journal of Cross-Cultural Psychology, 52(8–9), 771–793. https://doi.org/10.31235/osf.io/94msk

Alesina

Di Tella

MacCulloch

(2004). Inequality and happiness: Are Europeans and Americans different? Journal of Public Economics, 88(9–10), 2009–2042. https://doi.org/10.2139/ssrn.293781

Allison

P. D.

(2009). Fixed effects regression models. Sage. https://doi.org/10.4135/9781412993869

Basabe

Paez

Valencia

Gonzalez

J. L.

Rimé

Diener

(2002). Cultural dimensions, socioeconomic development, climate, and emotional hedonic level. Cognition & Emotion, 16(1), 103–125. https://doi.org/10.1080/02699930143000158

Basabe

Ros

(2005). Cultural dimensions and social behavior correlates: Individualism-collectivism and power distance [Dimensions culturelles et facteur sociaux associés: Individualisme, collectivisme et distance au pouvoir]. Revue Internationale de Psychologie Sociale, 18(1–2), 189–224.

Bates

Maechler

Bolker

Walker

Christensen

R. H. B.

Singmann

Dai

Green

(2009). Package “lme4.” http://lme4.r-forge.r-project.org

Bell

Jones

(2015). Explaining fixed effects: Random effects modeling of time-series cross-sectional and panel data. Political Science Research and Methods, 3(1), 133–153. https://doi.org/10.1017/psrm.2014.7

Berg

Veenhoven

(2010). Income inequality and happiness in 119 nations: In search for an optimum that does not appear to exist. In Greve

(Ed.), Happiness and social policy in Europe (pp. 174–194). Edward Elgar. https://doi.org/10.4337/9781781000731.00017

Brandolini

Smeeding

T. M.

(2008). Inequality patterns in western democracies: Cross-country differences and changes over time. In Beramendi

Anderson

C. J.

(Eds.), Democracy, inequality, and representation (pp. 25–61). Russell Sage Foundation.

10.

Cantril

(1965). The pattern of human concerns. Rutgers University Press.

11.

Fairbrother

(2014). Two multilevel modeling techniques for analyzing comparative longitudinal survey datasets. Political Science Research and Methods, 2(1), 119–140. https://doi.org/10.1017/psrm.2013.24

12.

Galbraith

J. K.

(2011). Inequality and economic and political change: A comparative perspective. Cambridge Journal of Regions, Economy and Society, 4(1), 13–27. https://doi.org/10.1093/cjres/rsq014

13.

Gallup World Poll. (2009). World Poll methodology. Gallup Inc.

14.

Gáspár

Cervone

Durante

Maass

Suitner

Valtorta

R. R.

Vezzoli

(2023). A twofold subjective measure of income inequality. Social Indicators Research, 168(1–3), 25–43. https://doi.org/10.1007/s11205-023-03121-w

15.

Graham

Felton

(2006). Inequality and happiness: Insights from Latin America. The Journal of Economic Inequality, 4(1), 107–122. https://doi.org/10.1007/s10888-005-9009-1

16.

Haller

Hadler

(2006). How social relations and structures can produce happiness and unhappiness: An international comparative analysis. Social Indicators Research, 75(2), 169–216. https://doi.org/10.1007/s11205-004-6297-y

17.

Heisig

J. P.

Schaeffer

(2019). Why you should always include a random slope for the lower-level variable involved in a cross-level interaction. European Sociological Review, 35(2), 258–279. https://doi.org/10.1093/esr/jcy053

18.

Helliwell

J. F.

Huang

(2008). How’s your government? International Evidence linking good government and well-being. British Journal of Political Science, 38(4), 595–619. https://doi.org/10.1017/s0007123408000306

19.

Henrich

Heine

S. J.

Norenzayan

(2010). The weirdest people in the world? Behavioral and Brain Sciences, 33(2–3), 61–83. https://doi.org/10.1017/S0140525X0999152X

20.

Hofstede

(1980). Culture and organizations. International Studies of Management & Organization, 10(4), 15–41. https://doi.org/10.1080/00208825.1980.11656300

21.

Hofstede

(2001). Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations (2nd ed.). Sage.

22.

Hofstede

G. J.

Minkov

(2010). Cultures and organizations: Software of the mind (Rev. 3rd ed.). McGraw-Hill.

23.

House

R. J.

Hanges

P. J.

Javidan

Dorfman

P. W.

Gupta

(Eds.). (2004). Culture, leadership, and organizations: The GLOBE study of 62 societies. Sage.

24.

Inglehart

(2006). Mapping global values. Comparative Sociology, 5(2–3), 115–136. https://doi.org/10.1163/156913306778667401

25.

Kaasa

(2021). Merging Hofstede, Schwartz, and Inglehart into a single system. Journal of Cross-Cultural Psychology, 52(4), 339–353. https://doi.org/10.1177/00220221211011244

26.

Kavarnou

Szumilo

(2018). Rich become richer and poor become poorer: A wealth inequality approach from Great Britain. In Arestis

Sawyer

(Eds.), Inequality. International papers in political economy. Palgrave Macmillan. https://doi.org/10.1007/978-3-319-91298-1_7

27.

Kelley

Evans

M. D. R.

(2017). Societal inequality and individual subjective well-being: Results from 68 societies and over 200,000 individuals, 1981–2008. Social Science Research, 62, 1–23. https://doi.org/10.1016/j.ssresearch.2016.04.020

28.

Kusano

Kemmelmeier

(2020). Multi-level modelling of time-series cross-sectional data reveals the dynamic interaction between ecological threats and democratic development. Royal Society Open Science, 7(3), 191804. https://doi.org/10.1098/rsos.191804

29.

Layte

(2012). The association between income inequality and mental health: Testing status anxiety, social capital, and neo-materialist explanations. European Sociological Review, 28(4), 498–511. https://doi.org/10.1093/esr/jcr012

30.

Zuckerman

Diener

(2019). Culture moderates the relation between income inequality and subjective well-being. Journal of Cross-Cultural Psychology, 50(10), 1221–1241. https://doi.org/10.1177/0022022119883019

31.

Minkov

Kaasa

(2022). Do dimensions of culture exist objectively? A validation of the revised Minkov-Hofstede model of culture with World Values Survey items and scores for 102 countries. Journal of International Management, 28(4), 100971. https://doi.org/10.1016/j.intman.2022.100971

32.

Minkov

Vignoles

V. L.

Welzel

Akaliyski

Bond

M. H.

Kaasa

Smith

P. B.

(2024). Comparative culturology and cross-cultural psychology: How comparing societal cultures differs from comparing individuals’ minds across cultures. Journal of Cross-Cultural Psychology, 55(2), 164–188.

33.

Ngamaba

K. H.

Panagioti

Armitage

C. J.

(2018). Income inequality and subjective well-being: A systematic review and meta-analysis. Quality of Life Research, 27(3), 577–596. https://doi.org/10.1007/s11136-0171719-x

34.

Oishi

Bak

Caluori

(2022). Cultural psychology of inequality: Current and future directions. Asian Journal of Social Psychology, 25(1), 103–116. https://doi.org/10.1111/ajsp.12516

35.

Oishi

Kesebir

Diener

(2011). Income inequality and happiness. Psychological Science, 22(9), 1095–1100. https://doi.org/10.1177/0956797611417262

36.

Rabe-Hesketh

Skrondal

(2008). Multilevel and longitudinal modeling using Stata. STATA press.

37.

Rözer

Kraaykamp

(2013). Income inequality and subjective well-being: A cross-national study on the conditional effects of individual and national characteristics. Social Indicators Research, 113(3), 1009–1023. https://doi.org/10.1007/s11205-012-0124-7

38.

Sagie

Aycan

(2003). A cross-cultural analysis of participative decision-making in organizations. Human Relations, 56(4), 453–473. https://doi.org/10.1177/0018726703056004003

39.

Scatolon

Galdi

Cervone

Mannetti

Maass

(2024). Absolutely inaccurate, relatively precise: Misperceiving wealth inequality across time.

40.

Schneider

S. M.

(2016). Income inequality and subjective wellbeing: Trends, challenges, and research directions. Journal of Happiness Studies, 17(4), 1719–1739. https://doi.org/10.1007/s10902-015-9655-3

41.

Schröder

(2016). How income inequality influences life satisfaction: Hybrid effects evidence from the German SOEP. European Sociological Review, 32(2), 307–320. https://doi.org/10.1093/esr/jcv136

42.

Schröder

(2018). Income inequality and life satisfaction: Unrelated between countries, associated within countries over time. Journal of Happiness Studies, 19(4), 1021–1043. https://doi.org/10.1007/s10902-0179860-3

43.

Schwartz

S. H.

(1994). Are there universal aspects in the structure and contents of human values? Journal of Social Issues, 50(4), 19–45. https://doi.org/10.1111/j.1540-4560.1994.tb01196.x

44.

Schwarze

Härpfer

(2007). Are people inequality averse, and do they prefer redistribution by the state? Evidence from German longitudinal data on life satisfaction. The Journal of Socio-Economics, 36(2), 233–249. https://doi.org/10.1016/j.socec.2005.11.047

45.

Solt

(2020). Measuring income inequality across countries and over time: The standardized world income inequality database. Social Science Quarterly, 101(3), 1183–1199. https://doi.org/10.31235/osf.io/mwnje

46.

Thorbecke

Charumilind

(2002). Economic inequality and its socioeconomic impact. World Development, 30(9), 1477–1495. https://doi.org/10.1016/s0305-750x(02)00052-9

47.

Verme

(2011). Life satisfaction and income inequality. Review of Income and Wealth, 57(1), 111–127. https://doi.org/10.1111/j.1475-4991.2010.00420.x

48.

Vezzoli

Valtorta

R. R.

Mari

Durante

Volpato

(2023). Effects of objective and subjective indicators of economic inequality on subjective well-being: Underlying mechanisms. Journal of Applied Social Psychology, 53(2), 85–100. https://doi.org/10.1111/jasp.12928

49.

Welzel

Inglehart

Kligemann

H. D.

(2003). The theory of human development: A cross-cultural analysis. European Journal of Political Research, 42(3), 341–379. https://doi.org/10.1111/1475-6765.00086

50.

Wilkinson

Picket

(2010). The spirit level: Why equality is better for everyone. Penguin.

51.

Zyphur

M. J.

Allison

P. D.

Tay

Voelkle

M. C.

Preacher

K. J.

Zhang

Hamaker

E. L.

Shamsollahi

Pierides

D. C.

Koval

Diener

(2020). From data to causes I: Building a general cross-lagged panel model (GCLM). Organizational Research Methods, 23(4), 651–687. https://doi.org/10.1177/1094428119847278

Supplementary Material

Please find the following supplemental material available below.

For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.

For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.

0.00 MB

0.32 MB