Perceived income inequality, perceived unfairness and subjective social status in Europe

Abstract This article examines the relationship between perceived income inequality, the perceived unfairness of income distribution (discrepancy between an individual’s perceived and preferred levels of income inequality) and subjective social status. Using four waves of the ‘Social Inequality’ module of the International Social Survey Programme (28 European countries, 70 000 individuals) and an empirical strategy that controls for a rich set of objective measures of social status and the objective level of income inequality, the results show that both perceived inequality and perceived unfairness are negatively associated with subjective social status. Moreover, perceived unfairness moderates the relationship between perceived inequality and subjective social status. Specifically, the negative effects are larger for individuals who perceive high levels of unfairness than for those with lower levels of perceived unfairness. The analysis also provides evidence that the association between perceived inequality and subjective social status is stronger for individuals with lower income, lower education, and those living in Eastern European countries.