Our forager ancestors developed a strong aversion to inequality, for good functional reasons. Norms against dominance were humanity’s first strong social norms. But our world is a very different place now, and other than our inherited dislike of inequality, it is not clear that inequality is on net good or bad. Since researchers are intuitively so averse to inequality, however, they are reluctant to publish on inequality’s advantages. So it is worth paying attention when they do:
Using the Chinese Urban Household Survey data between 1997 and 2006, we find that income inequality has a negative (positive) effect on household consumption net of education expenditures (savings) even after we control for household income. We argue that people save to improve their social status when social status is associated with pecuniary and non-pecuniary benefits. Rising income inequality can strengthen the incentives of status-seeking savings by increasing the benefit of improving status, and by enlarging the wealth level required for status upgrading. We also find that the negative effect of income inequality on consumption is stronger for poorer and younger people and that income inequality stimulates more education investment, which are consistent with the status-seeking hypothesis. (more)
Check this out: http://mjperry.blogspot.com... It shows that if European countries were states, they would not be rich states.
We tend to "normalize" our opinions of the economies of Europe and the U.S. But in $ to $ or Euro to Euro terms, the US is wealthier.
Most of what I'm finding on various statistics are based off of the 2000 census. Those have been fairly hashed over, and America's poor have done well for themselves considering what most people think of when hear the word "poor."
I downloaded a free pdf on the EUs census data, but that's a lot to slog through, but I'll keep reading.
One interesting note on the penetration of smartphone usage by country is that the richest countries were not the leaders. Italy and Spain had far more smartphone usage than America, UK or Germany. There did seem to be a slight negative correlation between internet penetration and smartphone usage so the countries that have lower internet penetration had higher smartphone usage. Implication being that smartphones are making up for their lack of internet access.
Not a lot of luck finding comparable data between bottom quintiles between nations though. Broad indices should be avoided though since government benefits are typically weighed heavily in such reports.
And that's the thing that needs to be clarified. When people start talking about income inequality it's a knee-jerk emotional reaction to say that income inequality is "bad" but overall purchasing power and purchasing power between income groups has to be considered. Living in a relatively wealthy country is better than living in a relatively poor country even though the income inequality is worse in the wealthier countries. So one can argue which is better, national health care or access to more material comfort across the board, but income inequality in and of itself is not the hobgoblin the redistributionists try to make it out to be.