COILS: Contextual Income Inequality and Life Satisfaction: Mechanisms and Moderators
Duration: January 2024–December 2026
Funding: Deutsche Forschungsgemeinschaft (DFG), Project no. 533150713
Funding Volume: 376.366 Euro
Reserachers at University of Bamberg
Dr. Peter Valet (Principal Investigator)
In public and academic debates, many experts and scholars argue that the current level of earnings inequality is too high and that reducing earnings inequality would improve overall well-being. The numerous studies on the impact of earnings inequality on individual life satisfaction, however, do not provide consistent results. The literature shows positive, negative, and no effects of income inequality on individual well-being. In addition to the findings, the theoretical foundation, the methodological analysis approach, and the interpretation of the research results obtained are often quite heterogeneous. Most studies investigate aggregate earnings inequality cross-comparatively. What often remains unclear is if people have any knowledge about the level on macro earnings inequality or what the mechanisms are that explain effects from the macro level to the micro level. Here, the COILS project aims to contribute:
(1) Drawing on sociological approaches on relational inequalities, this project challenges the common practice of looking at earnings inequality exclusively at the macro level. Apart from earnings inequality at the national level, people also experience inequalities within and across economic sectors, occupations, and workplaces. To analyze the effects of contextual inequalities, we need data on income inequalities for different contexts. This project uses different sources of registry data to generate representative measures of contextual earnings inequality and links them to data from existing social science surveys.
(2) The COILS project dedicates itself to the problem of causality by focusing on methods to identify causal effects. Following the approach of modern causal analysis, the aim of data analysis in this project is explicitly not to take into account as many influencing factors of individual well-being as possible, but to determine individual (causal) effects of contextual income inequalities on individual well-being as precisely as possible.