Income Inequality, Neighbourhood Social Capital and Subjective Well-Being in China: Exploration of a Moderating Effect

With the continuous global rise in inequality and the growing importance of subjective welfare, the relationship between income inequality and subjective well-being has received increasing attention. This paper focuses on neighbourhood social capital, measured at the individual and community levels, to explore its moderating effect on the association between income inequality and subjective well-being in the context of China, an issue few studies have examined. Using data from the China Labour-force Dynamics Survey and multilevel models, the results show that income inequality measured using three different indicators had a stable and negative association with subjective well-being in China, after controlling for various individual characteristics and aggregate-level factors. Although neighbourhood social capital at the individual level has been proven to promote subjective well-being, a dark side of social capital is also found at the community level. More notably, neighbourhood social capital at the individual level can attenuate the negative impact of income inequality on subjective well-being, especially for vulnerable groups, such as those with low income or low education. How to reasonably guide the community to develop social capital is an important policy implication to attenuate the negative psychological experience of income inequality.