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Another Reason To Worry About Inequality: Richer People Become Less Generous

Surprisingly, the worse inequality gets, the more that wealthy people may feel they should keep their money to themselves.

Another Reason To Worry About Inequality: Richer People Become Less Generous
[Top Photo: Jeff Hutchens/Getty Images]

Here’s another reason to worry about rising income inequality in America: It makes the rich less generous towards the poor.

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A new paper in the journal the Proceedings of the National Academy of Sciences finds that higher-income people are more stingy when they live in highly unequal places or simply when inequality is portrayed as being high (even if it’s not).

The research was led by Stéphane Côté, a professor at the University of Toronto’s Rotman School of Management, and it follows a string of recent studies showing richer people are more selfish than poorer people. For example, they’re more likely to break road laws and endanger pedestrians, to take candy from kids, and to feel less empathy for cancer sufferers. In all this, wealth is seen as a “corrupting force,” feeding a sense of entitlement and obliviousness to the plight of others.

But Côté says one thing struck him as strange about this work: In countries with lower rates of inequality–in Europe or Japan, for example–the effect wasn’t as strong. He wondered if inequality was a background factor to whether people are generous.

Igor Sinkov via Shutterstock

Across two experiments, the research seems to bear that out. First, Côté and fellow researchers Julian House and Robb Willer looked at data from the Measuring Morality survey, which measures generosity using the “Dictator Game.” That’s when participants are given 10 raffle tickets and told they can give away as many as they like, but that each forgone ticket reduces their chances of winning a cash prize. They found that “higher-income individuals are less generous in highly unequal areas, but more generous in less unequal areas.”

Second, they ran a real world experiment using 704 online volunteers. They showed simulated charts of income distribution in their state, showing either very high inequality or very low inequality. Then, as in the Dictator Game, the participants were asked to give away raffle tickets. People with household incomes above $125,000 (which isn’t exactly “rich”) were less generous when inequality was presented as high as opposed to when it was presented as low.

The work presents richer people in a better light than the earlier studies. It shows that those on higher-incomes are only ungenerous “under conditions of high actual or perceived macro-level economic inequality.” But that maybe isn’t much solace given how much inequality has been rising of late.

About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.

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