Is Inequality the Problem?

A data-rich analysis that will reshape our understanding of how rising income inequality has actually affected societies in the industrialized world.Increasing economic inequality is now one of the most studied subjects in the social sciences. The general view is that while its increase represents a bad social outcome in and of itself, its negative impact extends into numerous other realms of social life: declines in living standards for those in the lower deciles of the income ladder, worse health outcomes, reductions in happiness, and less opportunity for most. In Is Inequality the Problem?, Lane Kenworthy draws from a vast trove of research on the rich democracies to argue that while inequality is normatively a problem and we should therefore work to reduce it, the evidence from wealthier countries does not show that income inequality has contributed much at all to the other social ills it is associated with, like poor health outcomes. The effects vary from society to society, but typically the key contributors to negative trends like this one are factors other than inequality. Instead of trying to improve living standards, democracy, opportunity, health, and happiness indirectly via reduction in income inequality or wealth inequality, policy makers are more likely to make progress by pursuing these goals directly. This contrarian yet balanced account of one of the main social problems of our era will reshape our understanding of how rising economic inequality has affected societies in the industrialized world.