Perceptions of Increasing Economic Inequality Are Associated with Psychological Distress in East Asia: Evidence from China and South Korea

Economic inequality is a key challenge of our time. Prior research investigating the relationship between economic inequality and mental health has yielded inconclusive results. While some studies have demonstrated a negative relationship, others have found no significant association. To address these inconsistencies in the literature, the present study examines the relationship between perceptions of (growing) economic inequality and psychological distress in two East Asian countries—China and South Korea. Through two secondary data analyses, we consistently find that individuals’ subjective perception of increasing economic inequality is associated with greater psychological distress. Notably, this subjective perception yields a larger effect than the objective economic inequality as measured using GINI coefficients. Furthermore, among objective measures of economic inequality, we find that wealth inequality – specifically Housing Price GINI – is a better predictor of psychological distress compared to income inequality. We speculate that this may be because wealth inequality is more visible in people’s immediate environments. Our research contributes to a better understanding of the mental health effects of economic inequality, emphasising the importance of subjective and context-specific appraisals of economic inequality.