Perception has its Own Reality: Subjective versus Objective Measures of Economic Distress

Abstract

There is no doubt that economic inequality in the US has increased over the last several decades (Piketty, Saez, and Zucm 2016; Congressional Budget Office 2013). Diminished labor market opportunities and the ensuing decline in (inflation-adjusted) economic fortunes for the least educated Americans have been blamed for initiating a cascade of consequences culminating in rising mortality related to drugs, alcohol, and suicide (Case and Deaton 2017; 2015)—collectively referred to as “deaths of despair” (Khazan 2015; Case 2015; Monnat 2016). The health effects are evident in overall mortality as well: socioeconomic disparities in life expectancy have widened dramatically over this period (Chetty et al. 2016b; Bosworth, Burtless, and Zhang 2016), particularly among non-Latino whites (Olshansky et al. 2012; Sasson 2016). Beyond its effects on health, inequality can have far-reaching consequences for society as a whole, for example, by compromising social trust and cohesion and jeopardizing the effectiveness of social institutions (Kawachi and Berkman 2000; Kawachi et al. 1997). Indeed, arguments related to growing inequality have been invoked to explain many of the worrisome trends not only in mortality, but in a broader range of health outcomes, as well as social and political phenomena.