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

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.