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

Kaizhi Yu, Yun Zhang, Hong Zou and Chenchen Wang
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Kaizhi Yu: School of Statistics, Southwestern University of Finance and Economics, Chengdu 611130, China
Yun Zhang: School of Statistics, Southwestern University of Finance and Economics, Chengdu 611130, China
Hong Zou: School of Economics, Southwestern University of Finance and Economics, Chengdu 611130, China
Chenchen Wang: School of Arts, English and Languages, Queen’s University Belfast, Belfast BT7 1FY, UK

IJERPH, 2019, vol. 16, issue 14, 1-27

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.

Keywords: subjective well-being; migrants; absolute income; income inequality (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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