A Multi-Level Analysis of Life Satisfaction and Socioeconomic Status in Europe

• In Event: The Subjective Perception of Inequality, Status, and Insecurity

Abstract

Objective: Existing research emphasizes the mediating role of self-perceived status in connecting objective SES indicators to well-being. However, these studies often focus on single-country samples, overlooking the broader social context that influences individuals' identities. Consequently, they fall short in exploring how macro-level societal characteristics moderate the connection between well-being and subjective and objective SES.
The paper addresses a literature gap by investigating two key questions. Firstly, it explores whether socioeconomic status (SES) and subjective status gradients differ based on a country's wealth. Additionally, it examines the underexplored question of whether the significance of subjective status varies across countries. The study posits that the association between well-being and objective/subjective SES status is influenced by a country's affluence. The second set of questions explores whether the moderating effect of subjective status on well-being varies across countries based on their wealth, proposing a stronger role in more affluent societies where self-perception gains importance in lower material deprivation contexts. Conversely, in poorer societies, lower SES, despite high self-perception, is likely associated with severe material deprivation, negatively impacting well-being.
Method: The study utilized data from the 2012 European Social Survey (ESS), covering 28 European countries and involving 29,043 respondents aged 18 to 64. Employing multilevel regression analysis with life satisfaction (LS) as the dependent variable, the study utilized Stata 17 for model estimation. A two-stage estimation procedure was adopted to address the endogeneity problem in the analysis.
Results, discussion, and conclusion: The study hypothesized a reduced significance of objective status in wealthier countries, a hypothesis confirmed in the analysis. In affluent nations, incorporating subjective status nullified the link between objective status and life satisfaction (LS). However, in poorer countries, objective SES continued to predict LS even after considering subjective status. This challenges the general notion that people in richer countries are happier, revealing nuanced findings: First, the link between well-being and status is fully driven by subjective perceptions in more affluent countries. Second, average happiness is indeed higher in more affluent countries, but mainly because lower-status individuals catch up with those in the higher-status groups.
Although we did not formulate specific predictions about the subjective status gradient, we found that the association between subjective status and LS was stronger in poorer societies. Contrary to the findings on objective status, subjective status still matters in richer countries, even after controlling for objective SES. Thus, if we compare the observed patterns for objective and subjective status, we can conclude that individuals in more affluent countries might not be affected by material deprivation but also that their well-being is still negatively influenced by upward social comparison.
An important conclusion of our study is that, even though subjective status matters everywhere, its association with well-being is stronger in poorer countries. Crucially, individuals who believe themselves to be at the top of the social hierarchy enjoy similar levels of LS regardless of where they live. Again, this result might confirm that self-perceived social position is more important than real material conditions. The question remains as to why the effect of social hierarchy is more important in poorer countries, even after controlling for objective SES. We suggest that poverty and low status are more threatening in poorer countries, as economic and social insecurity are likely to have more profound effects on people’s lives.
Furthermore, we expected that the link between objective SES and LS would be moderated by subjective SES. Again, this expectation was fully confirmed by our data. A lower SES is negatively linked to LS only if people perceive their status to be low. This corroborates the idea that subjective status is one of the mechanisms through which objective SES impacts mental well-being. Thus, it is indeed true that “if men define situations as real, they are real in their consequences”.
Finally, we were interested in whether the moderating effect of subjective status varies across countries. We did not find any evidence that it does. In other words, our results indicate that, regardless of the context, the perception of social status equally reduces the impact of actual SES on LS. Further research is needed to explore other contextual factors, such as social inequality, that may alter the moderating effect of subjective status.
Keywords: life satisfaction; socioeconomic status; subjective status; cross-national

Authors

• Atefeh Bagherianziarat, Sociology department, Charles University, Prague

• Dana Hamplova, Institute of Sociology