Absolute Income, Income Inequality and the Subjective Well-Being of Migrant Workers in China: Toward an Understanding of the Relationship and Its Psychological Mechanisms

Abstract

No study has been conducted linking Chinese migrants’ subjective well-being (SWB) with urban inequality. This paper presents the effects of income and inequality on their SWB using a total of 128,000 answers to a survey question about “happiness”. We find evidence for a satiation point above which higher income is no longer associated with greater well-being. Income inequality is detrimental to well-being. Migrants report lower SWB levels where income inequality is higher, even after controlling for personal income, a large set of individual characteristics, and province dummies. We also find striking differences across socio-economic and geographic groups. The positive effect of income is more pronounced for rural and western migrants, and is shown to be significantly correlated with the poor’s SWB but not for the well-being of more affluent respondents. Interestingly, high-income earners are more hurt by income inequality than low-income respondents. Moreover, compared with migrants in other regions, those in less developed Western China are found to be more averse to income inequality. Our results are quite robust to different specifications. We provide novel explanations for these findings by delving into psychological channels, including egalitarian preferences, social comparison concerns, expectations, perceived fairness concerns and perceived social mobility.

Income Trajectories and Subjective Well-Being: Linking Administrative Records and Survey Data

“…Subjective well-being (SWB) is increasingly recognized as an important outcome in public health and has already been used to study socioeconomic inequalities in health (e.g., [1,2]). In particular, the association between income and SWB has been a flourishing area of study as the question whether money increases well-being is not only of academic interest but also of relevance for society and politics [3].…”

Urban sustainability and the subjective well‐being of migrants: The role of risks, place attachment, and aspirations

“…The prevalence of the miserable migrant effect among rural to urban migrants is explained by migrants' precarious material conditions, negative social experiences, and the social costs of migration, as well as rising aspirations at destination. Despite having higher incomes in cities, migrants often report lowered levels of subjective well‐being (Chen et al, 2019; Mulcahy & Kollamparambil, 2016; Yu et al, 2019). This partly occurs because migrants evaluate their material circumstances not in absolute terms but relative to the status of native urban residents who become their new social reference group (Mulcahy & Kollamparambil, 2016; Yu et al, 2019).…”

Material and Subjective Wellbeing of Malaysian Household: A Comparative Analysis

“…In addition, some evidences suggest education has both positive and negative effects on subjective wellbeing. As education has the potential to influence people's employment, income and social status (Agrawal et al, 2010;Ross & Willigen, 1997), the results often contribute to improving the individuals' subjective wellbeing in positive ways (Yu et al, 2019;Diener & Scollon, 2003;Frey & Stutzer, 2003).…”