Older Adults’ Mental Health in China: Examining the Relationship Between Income Inequality and Subjective Wellbeing Using Panel Data Analysis

  • Nan Zou BakkeliEmail author
Research Paper


Although people in China are experiencing rapid economic growth, higher income, and better living standards, the level of subjective wellbeing has not risen correspondingly. According to the ‘Easterlin Paradox’, economic growth does not necessarily bring about improvement in wellbeing, because an important part of happiness comes from making comparisons. This study investigates the relationship between income inequality and subjective wellbeing in China, focusing on older adults between 60 and 90 years. Empirical evidence is drawn from the Chinese Health and Nutrition Survey 2006, 2009, and 2011 waves. Using county-level fixed-effects estimation, the analyses show that generally, income inequality is negatively associated with subjective wellbeing, net of individual income. The association between inequality and wellbeing varies between people with rural or urban household registration status, and between people ranked within different income deciles. The association between inequality and wellbeing is stronger for people with urban household registration status, and for people ranked within higher income deciles.


Income inequality Subjective wellbeing Older adults China 



  1. Alesina, A., Di Tella, R., & MacCulloch, R. (2004). Inequality and happiness: Are Europeans and Americans different? Journal of Public Economics, 88, 2009–2042. Scholar
  2. Appleton, S., & Song, L. (2008). Life satisfaction in urban China: Components and determinants. World Development, 36, 2325–2340. Scholar
  3. Bakkeli, N. Z. (2016). Income inequality and health in China: A panel data analysis. Social Science and Medicine, 157, 39–47. Scholar
  4. Bakkeli, N. Z. (2017). Income inequality and privatisation: A multilevel analysis comparing prefectural size of private sectors in Western China. J Chin Sociol, 4, 7. Scholar
  5. Bartolini, S., & Sarracino, F. (2015). The dark side of Chinese growth: Declining social capital and well-being in times of economic boom. World Development, 74, 333–351. Scholar
  6. Bjørnskov, C. (2003). The happy few: cross-country evidence on social capital and life satisfaction. Kyklos, 56, 3–16. Scholar
  7. Brockmann, H., Delhey, J., Welzel, C., & Yuan, H. (2008). The China puzzle: Falling happiness in a rising economy. Journal of Happiness Studies, 10, 387–405. Scholar
  8. Burchardt, T. (2005). are one man’s rags another man’s riches? Identifying adaptive expectations using panel data. Social Indicators Research, 74, 57–102. Scholar
  9. Caporale, G. M., Georgellis, Y., Tsitsianis, N., & Yin, Y. P. (2009). Income and happiness across Europe: Do reference values matter? Journal of Economic Psychology, 30, 42–51. Scholar
  10. Chan, C. K., Ngok, K. L., & Phillips, D. (2008). Social policy in China: Development and well-being. Bristol: Policy Press.Google Scholar
  11. Chen, Z., & Zhou, Y. (2005). Income distribution during system reform and economic development in China: The status and trend of income inequality of Chinese residents. Hauppauge: Nova Publishers.Google Scholar
  12. Chow, G. C. (2007). China’s economic transformation. Oxford: Blackwell Publishing.Google Scholar
  13. Clark, A. E. (2003). Inequality-aversion and income mobility: A direct test. DELTA (Ecole normale supérieure).Google Scholar
  14. Clark, A. E., & Senik, C. (2011). Will GDP growth increase happiness in developing countries? Institute for the Study of Labor (IZA).Google Scholar
  15. Costa, M. M. N. D, & Ji, J. (2004). Rural–urban economic disparities among China’s elderly. European Regional Science Association.Google Scholar
  16. D’Acci, L. (2011). Measuring well-being and progress. Social Indicators Research, 104, 47–65. Scholar
  17. D’Ambrosio, C., & Frick, J. R. (2007). Income satisfaction and relative deprivation: An empirical link. Social Indicators Research, 81, 497–519. Scholar
  18. Deaton, A. (2008). Income, health and wellbeing around the world: Evidence from the gallup world poll. The Journal of Economic Perspectives, 22, 53–72. Scholar
  19. Di Tella, R., MacCulloch, R. J., & Oswald, A. J. (2003). The macroeconomics of happiness. Review of Economics and Statistics, 85, 809–827. Scholar
  20. Diener, E., & Chan, M. Y. (2011). Happy people live longer: Subjective well-being contributes to health and longevity. Applied Psychology: Health and Well-Being, 3, 1–43. Scholar
  21. Diener, E., Lucas, R. E., & Oishi, S. (2002). Subjective well-being: The science of happiness and life satisfaction. In S. J. Lopez & C. R. Snyder (Eds.), Handbook of positive psychology (pp. 63–73). Oxford and New York: Oxford University Press.Google Scholar
  22. Diener, E., Scollon, C. N., & Lucas, R. E. (2003). The evolving concept of subjective well-being: The multifaceted nature of happiness. Recent Advances in Psychology Aging, 15, 187–219. Scholar
  23. Diener, E., Suh, E. M., Lucas, R. E., & Smith, H. L. (1999). Subjective well-being: Three decades of progress. Psychological Bulletin, 125, 276–302.Google Scholar
  24. Easterlin, R. A. (1974). Does economic growth improve the human lot? Some empirical evidence. In P. A. David & M. W. Reder (Eds.), Nations and households in economic growth: Essays in honor of Moses Abramovitz (pp. 89–125). New York: Academic Press.Google Scholar
  25. Easterlin, R. A. (2001). Income and happiness: Towards a unified theory. Economic Journal, 111, 465–484. Scholar
  26. Easterlin, R. A. (2008). Lost in transition: Life satisfaction on the road to capitalism. Institute for the Study of Labor.Google Scholar
  27. Elster, J. (1982). Utilitarianism and the genesis of wants. In A. K. Sen & B. A. O. Williams (Eds.), Utilitarianism and beyond (pp. 219–238). Cambridge: Cambridge University Press.Google Scholar
  28. Fang, H., & Rizzo, J. A. (2011). Does inequality in China affect health differently in high- versus low-income households? Applied Economics, 44, 1081–1090.Google Scholar
  29. Feng, N., & Xiao, N. (2007). Population aging in China as reflected by the results of the 2005 population sample survey. Department of Population and Employment Statistics, National Bureau of Statistics of China.Google Scholar
  30. Feng, W. (2011). Social exclusion of the elderly in contemporary China: One empirical study based on the surveys in six provinces. China Development Research Foundation.Google Scholar
  31. Feng, Z., Wang, W. W., Jones, K., & Li, Y. (2012). An exploratory multilevel analysis of income, income inequality and self-rated health of the elderly in China. Social Science and Medicine, 75, 2481–2492. Scholar
  32. Ferrer-i-Carbonell, A., & Frijters, P. (2004). How important is methodology for the estimates of the determinants of happiness? Econ J, 114, 641–659. Scholar
  33. Festinger, L. (1954). A theory of social comparison processes. Human Relations, 7, 117–140.Google Scholar
  34. Firebaugh, G., & Schroeder, M. B. (2009). Does your neighbor’s income affect your happiness? American Journal of Sociology, 115, 805–831.Google Scholar
  35. Fischer, C. S. (2007). What wealth-happiness paradox? A short note on the American case. Journal of Happiness Studies, 9, 219–226. Scholar
  36. Gallup-Healthways. (2015). State of global well-being: 2014 country well-being rankings. Gallup-Healthways.Google Scholar
  37. Ge, L., & Shu, L. (2001). Making the transition from family support for the elderly to social support for the elderly. Chinese Sociological Review, 34, 35–48. Scholar
  38. Giles, J., Wang, D., & Cai, W. (2012). The labor supply and retirement behavior of China’s older workers and elderly in comparative perspective. In J. Smith & M. Majmundar (Eds.), National Research Council (US) Panel on policy research and data needs to meet the challenge of aging in Asia. Washington DC: National Academies Press.Google Scholar
  39. Górniak, J. (2000). Poverty in transition: Lessons from eastern Europe and central Asia. In A. Grinspun (Ed.), Choices for the poor: Lessons from national poverty strategies (pp. 145–172). New York: UNDP.Google Scholar
  40. Graham, C., Eggers, A., & Sukhtankar, S. (2004). Does happiness pay? An exploration based on panel data from Russia. Journal of Economic Behavior & Organization, 55, 319–342.Google Scholar
  41. Gruen, C., & Klasen, S. (2005). Has transition improved well-being? An analysis based on income, inequality-adjusted income, nonincome, and subjective well-being measures. Economic Research Southern Africa.Google Scholar
  42. Headey, B., Kelley, J., & Wearing, A. (1993). Dimensions of mental health: Life satisfaction, positive affect, anxiety and depression. Social Indicators Research, 29, 63–82. Scholar
  43. Hirschman, A., & Rothschild, M. (1973). The changing tolerance for income inequality in the course of economic development. Quarterly Journal of Economics, 87, 544–566.Google Scholar
  44. Hu, Z., & Peng, X. (2015). Household changes in contemporary China: An analysis based on the four recent censuses. Chinese Journal of Sociology. Scholar
  45. ILO. (2015). Labour migration. In: International Labour Organ.–en/index.htm. Accessed September 23, 2015.
  46. Jiang, S., Lu, M., & Sato, H. (2008). Happiness in the dual society of urban China: Hukou identity, horizontal inequality and heterogeneous reference. LICOS - Centre for Institutions and Economic Performance, KU Leuven.Google Scholar
  47. Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. Proceedings of National Academy of Sciences, 107, 16489–16493. Scholar
  48. Keyes, C. L. M. (2005). Mental illness and/or mental health? Investigating axioms of the complete state model of health. Journal of Consulting and Clinical Psychology, 73, 539–548. Scholar
  49. Keyes, C. L. M. (2006). Subjective well-being in mental health and human development research worldwide: An introduction. Social Indicators Research, 77, 1–10.Google Scholar
  50. Knight, J., & Gunatilaka, R. (2010). Great expectations? The subjective well-being of rural–urban migrants in China. World Development, 38, 113–124. Scholar
  51. Knight, J., & Gunatilaka, R. (2011). Does economic growth raise happiness in China? Oxford Development Studies, 39, 1–24. Scholar
  52. Knight, J., Song, L., & Gunatilaka, R. (2009). Subjective well-being and its determinants in rural China. China Economic Review, 20, 635–649. Scholar
  53. Layte, R., & Whelan, C. T. (2014). Who feels inferior? A test of the status anxiety hypothesis of social inequalities in health. European Sociological Review, 30, 525–535. Scholar
  54. Li, L. W., & Liang, J. (2007). Social exchanges and subjective well-being among older Chinese: Does age make a difference? Psychology and Aging, 22, 386–391. Scholar
  55. Li, Y., Aranda, M. P., & Chi, I. (2007). Health and life satisfaction of ethnic minority older adults in mainland China: Effects of financial strain. International Journal of Aging and Human Development, 64, 361–379.Google Scholar
  56. Lou, V. W. Q., & Gui, S. (2011). Chapter 14. The psychological well-being of older people. In S. Chen & L. Powell Jason (Eds.), Aging in perspective and the case of China (pp. 213–229). Hauppauge: Nova Science Publishers.Google Scholar
  57. Lu, Y., & Wang, T. (2011). Income inequality, social crime, and citizens’ happiness. China Economic Quarterly, 10, 1437–1457.Google Scholar
  58. Marshall, G., & Firth, D. (1999). Social mobility and personal satisfaction: Evidence from ten countries. British Journal of Sociology, 50, 28–48.Google Scholar
  59. NBSC. (2013). Ma Jiantang answering reporters’ questions about national economic operation in 2012 (马建堂就2012年国民经济运行情况答记者问). In National Bureau of Statistics of China. Accessed June 21, 2013.
  60. NBSC. (2015). National data. In National Bureau of Statistics of China. Accessed August 5, 2015.
  61. Nussbaum, M. (2001). Adaptive preferences and women’s options. Economics & Philosophy, 17, 67–88.Google Scholar
  62. Oishi, S., Kesebir, S., & Diener, E. (2011). Income inequality and happiness. Psychological Science, 22, 1095–1100. Scholar
  63. Okabayashi, H., Liang, J., Krause, N., et al. (2004). Mental health among older adults in Japan: Do sources of social support and negative interaction make a difference? Social Science and Medicine, 59, 2259–2270. Scholar
  64. Raymo, J. M., Kikuzawa, S., Liang, J., & Kobayashi, E. (2008). Family structure and well-being at older ages in Japan. Journal of Population Research, 25, 379–400. Scholar
  65. Rim, Y. (1993). Values, happiness and family structure variables. Personality and Individual Differences, 15, 595–598.Google Scholar
  66. Runciman, W. G. (1966). Relative deprivation and social justice: A study of attitudes to social inequality in twentieth-century England. Oakland: University of California Press.Google Scholar
  67. Sen, A. (1987). The standard of living. Cambridge: Cambridge University Press.Google Scholar
  68. Silverstein, M., Cong, Z., & Li, S. (2006). Intergenerational transfers and living arrangements of older people in rural China: Consequences for psychological well-being. Journals of Gerontology: Series B, Psychological Sciences and Social Sciences, 61, S256–S266.Google Scholar
  69. Steele, L. G., & Lynch, S. M. (2013). The pursuit of happiness in China: Individualism, collectivism, and subjective well-being during China’s economic and social transformation*. Social Indicators Research. Scholar
  70. Steptoe, A., Deaton, A., & Stone, A. A. (2015). Psychological wellbeing, health and ageing. Lancet, 385, 640–648. Scholar
  71. United Nations. (2007). World Economic and Social Survey 2007: Development in an ageing world. United Nations, Department of Economic and Social Affairs, New York.Google Scholar
  72. Veenhoven, R. (2008). Sociological theories of subjective well-being. In M. Eid & R. J. Larsen (Eds.), The science of subjective well-being (pp. 44–61). New York: Guilford Press.Google Scholar
  73. Venkatraman, M. M. (1995). A cross-cultural study of the subjective well-being of married elderly persons in the United States and India. The Journals of Gerontology Series B, 50B, S35–S44. Scholar
  74. Verme, P. (2011). Life satisfaction and income inequality. Washington: The World Bank.Google Scholar
  75. Wang, J., & Xie, Y. (2014). Feeling good about the iron rice bowl: Economic sectors and happiness in post-reform urban China. Population Studies Center, University of Michigan.Google Scholar
  76. Wang, P., Pan, J., & Luo, Z. (2015). The impact of income inequality on individual happiness: Evidence from China. Social Indicators Research, 121, 413–435. Scholar
  77. Wang, P., & VanderWeele, T. J. (2010). Empirical research on factors related to the subjective well-being of Chinese urban residents. Social Indicators Research, 101, 447–459. Scholar
  78. Western, M., & Tomaszewski, W. (2016). Subjective wellbeing, objective wellbeing and inequality in Australia. PLoS ONE. Scholar
  79. Whyte, M. (2003). China’s revolutions and intergenerational relations. In M. K. Whyte (Ed.), Chna’s revolutions and intergenerational relations. Ann Arbor: University of Michigan Center for Chinese Studies.Google Scholar
  80. Whyte, M. K. (2010). One country, two societies: Rural–Urban inequality in contemporary China. Cambridge: Harvard University Press.Google Scholar
  81. Whyte, M. K., & Im, D.-K. (2014). Is the social volcano still dormant? Trends in Chinese attitudes toward inequality. Social Science Research, 48, 62–76. Scholar
  82. Wilkinson, R. G. (1996). Unhealthy societies: The afflictions of inequality (1st ed.). London, New York: Routledge.Google Scholar
  83. Wilkinson, R. G. (2006). The impact of inequality: How to make sick societies healthier. New York: The New Press.Google Scholar
  84. Wilkinson, R. G., & Pickett, K. E. (2017). The enemy between us: The psychological and social costs of inequality. European Journal of Social Psychology, 47, 11–24. Scholar
  85. Wong, N., Gong, X., & Fung, H. H. (2019). Does valuing happiness enhance subjective well-being? The age-differential effect of interdependence. Journal of Happiness Studies. Scholar
  86. Wu, Q., Cheng, J., Chen, G., et al. (2014). Socio-spatial differentiation and residential segregation in the Chinese city based on the 2000 community-level census data: A case study of the inner city of Nanjing. Cities, 39, 109–119. Scholar
  87. Wu, X., & Li, J. (2017). Income inequality, economic growth, and subjective well-being: Evidence from China. Research in Social Stratification and Mobility, 52, 49–58. Scholar
  88. Xie, Y., & Hannum, E. (1996). Regional variation in earnings inequality in reform-era urban China. American Journal of Sociology, 101, 950–992.Google Scholar
  89. Xie, Y., Thornton, A., Wang, G., & Lai, Q. (2012). Societal projection: Beliefs concerning the relationship between development and inequality in China. Social Science Research, 41, 1069–1084. Scholar
  90. Xie, Y., & Zhou, X. (2014). Income inequality in today’s China. Proceedings of National Academy of Sciences, 111, 6928–6933. Scholar
  91. Yeung, W. J., & Xu, Z. (2011). Economic stress, quality of life, and mortality for the oldest-old in China. Social Indicators Research, 108, 131–152. Scholar
  92. Yitzhaki, S. (1979). Relative deprivation and the Gini coefficient. Quarterly Journal of Economics, 93, 321–324. Scholar
  93. Yuki, M. (2003). Intergroup comparison versus intragroup relationships: A cross-cultural examination of social identity theory in North American and East Asian cultural contexts. Social Psychology Quarterly, 66, 166–183. Scholar
  94. Zeng, Y., & Wang, Z. (2004). Family and changes of living arrangement of the elderly in China (中国家庭与老年人居住安排的变化). Chinese Journal of Population Science, 5, 2–8. Scholar
  95. Zhang, Z., Gu, D., & Luo, Y. (2014). Coresidence with elderly parents in contemporary China: The role of filial piety, reciprocity, socioeconomic Resources, and parental needs. Journal of Cross-Cultural Gerontology, 29, 259–276. Scholar
  96. Zhao, W. (2012). Economic inequality, status perceptions, and subjective well-being in China’s transitional economy. Research in Social Stratification and Mobility, 30, 433–450. Scholar

Copyright information

© Springer Nature B.V. 2019

Authors and Affiliations

  1. 1.Oslo Metropolitan UniversityOsloNorway

Personalised recommendations