Social Ills in Rich Countries: New Evidence on Levels, Causes, and Mediators

Abstract

Abstract The income inequality hypothesis claims that in rich societies inequality causes a range of health and social problems (henceforth: social ills), e.g. because economic inequality induces feelings of status anxiety and corrodes social cohesion. This paper provides an encompassing test of the income inequality hypothesis by exploring levels and breeding conditions of social ills in 40 affluent countries worldwide, as well as pathways for a subsample of wealthy European countries. Our aggregate-level research is based on a revised and updated Index of Social Ills inspired by Wilkinson and Pickett’s book The Spirit Level, which we compile for both more countries (40) and more years (2000–2015) and combine with survey information about experienced quality-of-life as potential mediators. We get three major results: First, cross-sectionally income inequality is indeed strongly and consistently related to social ills, but so is economic prosperity. Second, while longitudinally changes in inequality do not result in changing levels of social ills, rising prosperity effectively reduces the amount of social ills, at least in Europe. Finally, whereas the cross-sectional analysis indicates that aspects of social cohesion most consistently mediate between economic conditions and social ills, the longitudinal mediation analyses could not ultimately clarify through which pathway rising prosperity reduces social ills. Overall we conclude that the income inequality hypothesis is, at best, too narrow to fully understand health and social problems in rich countries.

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