Life Satisfaction in an Unequal World: On the Moderating Role of GDP Per Capita and National Culture

Research has shown ambiguous effects of income inequality on life satisfaction, despite income inequality often being associated with numerous detrimental effects. To explore this strange phenomenon, we investigate how economic factors and national culture influence this relationship. This paper theorizes that the relation is contingent on income per capita, individualism, power distance, masculinity and uncertainty avoidance. Income per capita and uncertainty avoidance are expected to negatively moderate the relationship between income inequality and life satisfaction, whereas power distance and masculinity likely have an opposite moderating effect. The expected moderating influence of individualism is ambiguous. Using the Hofstede framework of national culture and a sample of 280,378 survey observations for individuals from 61 countries for the period 1990–2022, we find that the relationship between income inequality and life satisfaction is negatively moderated by income per capita and individualism, and positively by power distance. No robust moderation effect is detected for masculinity and for uncertainty avoidance. Our findings highlight the importance of cultural and economic factors in moderating the relationship between income inequality and life satisfaction.