Happiness Inequality in China

Along with China becoming an upper-middle-income country from a lower-middle-income one after 2009, happiness inequality in China has been enlarged. Based on the Chinese General Social Survey database (2003-2015), this paper investigates the determinants of happiness inequality in China and explores what factors contribute to its enlargement after 2009. We find that a rise of income inequality as well as the population share of middle age cohorts can widen China's happiness inequality, while an increase in income or education level has a reducing impact. Being in employment also has happiness inequality reducing impacts. A decomposition analysis shows that the deterioration of China's happiness inequality is mainly caused by coefficient effects, i.e., the relationships between happiness inequality and its influencing factors have changed, which reflects the dramatic change in the Chinese economy and society. Among the coefficient effects, regional heterogeneity plays an important role. Policies enhancing economic performance and education as well as reducing income inequality and regional inequality can help to mitigate happiness inequality and improve social harmony in China.