Yes, inequality kills

In The Spirit Level, Richard Wilkinson and Kate Pickett claim that “unequal societies are almost always unhealthy societies.” Some new research provides laboratory evidence for this.
Armin Falk and colleagues conducted a simple experiment. They split people into pairs. One person had to do a tedious job, of counting the number of zeros on sheets of numbers, with the pair being paid according to the number of correct answers. The other was given the role of boss, who did nothing except decide how to allocate the revenue thus generated between himself and the worker.
They found that “workers” who felt they were unfairly paid had significantly lower heart rate variability than those with less sense of unfairness.
This matters, because it’s thought that low HRV can predict heart failure.
Falk and colleagues corroborate this by showing that survey evidence links perceptions of being unfairly paid with subjective assessments of personal health.
What we have here, then, is clean micro-level evidence for a link between a sense of unfairness and physiological symptoms.
This is significant. Wilkinson and Pickett’s evidence - which is based mainly upon cross-country correlations between inequality and life expectancy - has been strongly criticized for relying upon a selective sample of data. This evidence, though, seems more robust - it's less vulnerable to the omitted variables bias if nothing else; it‘s reasonable to suppose that if something as trivial as a lab experiment can provoke changes in HRV, then the real world of longer-lasting senses of grievance might also do so, and probably to a greater extent.
There is, though, a slight caveat here. Falk and colleagues are measuring subjective senses of fairness. This means that a man who gets a £1m bonus but who thinks he deserves a £2m one will - ceteris paribus - have lower HRV than a minimum wage worker who feels fairly treated. I‘m not sure, though, that this undermines the basic point, which is that inequality really is bad for health.

Comments

[Nick]

Or it might just mean that playing and losing in the dictator game is bad for your heart health. I think it might have interesting things to say about rentiers (which is what the boss is in this case) and hierarchy, but not necessarily so much about income inequality. Fair pay is, of course, not the same as equal pay.

Also, the Spirit Level claimed that inequality is bad for everyone - do we know what effect unfair pay had on the bosses?

[Jimmy Hill]

"I‘m not sure, though, that this undermines the basic point, which is that inequality really is bad for health."

Isn't the basic point that feeling unfairly treated is bad for health?

Inequality may cause some people to feel unfairly treated but it isn't necessarily so.

[Dan]

"inequality really is bad for health"

at best, all that seems to have been shown is that perceived unfairness is bad for health. So, ironically, perhaps books like The Spirit Level and blogs like this one -- i.e. those that continually make the case that inequality is unfair -- are, in their own way, partially responsible for whatever negative outcomes occur.

[Luis Enrique]

wow - I've always objected to The Spirit Level not because I think inequality is harmless, but because I thought they picked on the weakest of all possible mechanisms (pyschological effects). Maybe it turns out I was wrong.

Although if the data does not in fact say inequal countries are unhealthier countries, doesn't that just tell us that lab experiments don't generalize to the real world?

[Phil]

A friend of mine at college was a medical student from a fairly privileged background (not *old* old money, but at least 100 years old). I remember asking him once about the association between heart disease and stress; he said that actually that one didn't stand up, because the data showed that there were actually more heart attacks in the *lower* social classes.

I was lost for words.

[Luis Enrique]

of course, it might be that stress is more to do with absolute income rather than relative, in which case TSL is still wrong.

plus, if you think people adjust to their environment, inequality doesn't necessarily predict a sense of unfairness.

[Paolo]

Oh boy, I am an economist as most of you probably but let me tell you something, you are not under a duty to raise caveat and "yes but" all the time - so every now and then just take it as it is, and avoid sounding tedious.

[Tim Worstall]

"I‘m not sure, though, that this undermines the basic point, which is that inequality really is bad for health."

Your conclusion does not follow from the finding:

"They found that “workers” who felt they were unfairly paid"

To make that stand up you have to prove that "workers" perceive inequality as being unfair. Inequality per se that is, not unequal treatment of people doing the same thing.

Which, if I'm remembering a recent survey of what Brits consider to be "fair" they don't.

[Yo Gabba Gabba]

How does a self-reported "felt" and a "it’s thought" rise up to "clean" evidence? For that matter how does "micro-level" evidence rise to "This is significant"? those attenuated chains may be sufficent for confirmation bias, but little else.

[L'Observer]

May I suggest two possible source problems.
First, I have no knowledge about the dangers of heart rate variability but I do know that medical research appears to have a very difficult time separating cause and effect. For example, contradictory studies show drinking x amounts daily of red/white wine is good/bad for you because the researchers can find 'evidence' of these 'links'. Clearly an inability to distinguish between cause an effect.
Secondly, academic economists have recently championed the idea that evidence based economics is the way to develop the discipline. (Some us who are older, and more cynical, micro-economists have suggested that macro-economists might get greater insights by re-examining the 15 or so monetary transmission mechanisms that didn't work under the GEC).
Presumably the results of this paper come from lab trials of students/volunteers (I couldn't find anywhere in the cited paper as to the nature of the participants of the trials. There may be people who still believe that testing students/volunteers in a laboratory reflects the real world - but, if so, I suspect they are all academics.
Hence, I would strongly disagree with your conclusion that there 'is clean micro-level evidence for a link between a sense of unfairness and physiological symptoms'.

[Luis Enrique]

so indocrinating the masses with the belief that capitalism is fair saves lives!

now, there's a trade off. We're going to open your eyes to the nature of capitalist exploitation = I'm sorry, we're going to have to kill you.

[Cliff Tolputt]

Hi Luis,

Waste not the energy. It will happen anyway.

Death is the great equaliser. That thought is sometimes a great solace as I contemplate human nature (as represented by others, of course).

[PPS]

Falk and colleagues are measuring subjective senses of fairness.
≠
Yes, inequality kills

[A1]

What this shows is that unhealthiness is associated with perceived unfairness, not that it's associated with inequalitty (especially in the sense of that word as used by the authors of The Spirit Level).

But there's a bigger problem here. imagine that we wanted to reduce the negative health outcomes that are associated with perceived unfairness. Whatever tool we used would have other impacts, many on the right might argue that such a tool would lower economic growth rates. They would then say that such a tool would reduce the resources of a country available to spend on healthcare. Leading to negative health outcomes.

So yes, following the title of the article, perceived unfairness kills. But so does lower growth. What we should do, if we want to be evidence based, is not look at perceived unfairness, or inequality, on it's own, but in the round. We could plot data on inequality against unhealthiness and see if there's a correlation? But if you do this with the latest OECD data you don't get the result in the Spirit Level. See for example: http://velvetgloveironfist.blogspot.com/2011/05/does-better-life-index-support-spirit.html?m=1

[Cahal]

A1,

Those on the right would be wrong. Economic rent currently goes largely untaxed, and taxing economic rent encourages growth because it is wealth extraction, not creation.

This was largely recognised in the 18th and 19th centuries, when they had 90% marginal rates and land taxes to collect it.

It is now mostly ignored by neoclassical economics, which was actually constructed as a direct defence of the recipients of rent.

http://www.youtube.com/watch?v=CnrEHFwZ9hk

Over at the angry bear blog, they have calculated (repeatedly and using numerous different methods) that the optimum marginal tax rate (on the top 1%) for growth is about 65%. What are we waiting for?

Oh yes, it would impact the rich. How silly of me.

[A1]

Problem is Cahal, that to achieve income equality you need to do more than tax the top one per cent. I doubt very much whether in the experiments described above the 'managers paid themselves top one per cent salaries.