Income Inequality Makes Wealthy Less Generous, Study Finds

Compared to their peers in states with lower income inequality, wealthy people in states with higher income inequality are more likely to be less generous than the poor, a report published in Proceedings of the National Academy of Sciences finds.

Conducted by researchers at the University of Toronto and Stanford University, the study, High Economic Inequality Leads Higher-Income Individuals to Be Less Generous (6 pages, PDF), analyzed data from a nationally representative poll of fifteen hundred Americans which gauged generosity through a "giving" game that has been shown to correlate with real-life giving. In states with the greatest income inequality, higher-income respondents were less likely to give generously than lower-income ones, while in states with the least inequality, the wealthy showed more generosity than the poor. Among another seven hundred study participants who were shown fake data portraying their states as having high or low levels of inequality, wealthy respondents who believed they lived in highly unequal states gave less generously than poorer ones, while among participants who were told they lived in states with more even income distributions, the rich were slightly more generous than the poor.

While previous research in the U.S. has shown that the rich are stingier than the poor, studies in Europe and Japan have not found the same tendency. The report's authors suggest that concentrating wealth in the hands of a few may lead to a sense of entitlement that makes the rich less altruistic and lead them to "believe that resources rightly belong to them."

Lyle Scruggs, a political scientist at the University of Connecticut, told Bloomberg Business that the findings are consistent with unpublished research that shows cuts to social welfare programs such as unemployment insurance followed increases in inequality at the state level. "If the people in charge are even richer," said Scruggs, "are they less likely to care about those less fortunate, and therefore be less generous, as a mindset?"

"High Economic Inequality Leads Higher-Income Individuals to Be Less Generous." Proceedings of the National Academy of Sciences Report 11/20/2015. John Tozzi. "Income Inequality Makes Rich People Stingier." Bloomberg Business 11/23/2015.