Pedestrians walk past a homeless man as he shuffles down a street in New York January 4, 2016. New York Governor Andrew Cuomo signed an executive order on Sunday requiring local officials throughout the state to force the homeless into shelters when temperatures dip below freezing and vowed to defend the edict if challenged in court. REUTERS/Lucas Jackson - RTX210OU
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The rich even have a better kind of stress than the poor

Carol Graham

The poor typically score lower than the rich on markers of well-being, ranging from life satisfaction and happiness to objective indicators of health. (See here for one of my previous analyses.) This matters because individuals with higher levels of well-being and hope for the future tend to invest more in it, objective conditions being held equal. This connection between belief and behavior helps to explain why some cohorts continue to get ahead and others fall further and further behind.

Chronic stress is bad for social mobility

What about stress? Stress can be a marker of ill-being which is particularly important to individuals’ ability to plan for and make the investments necessary for upward mobility, such as education or preventive health care. Stress is associated with lower levels of well-being in general—both in the U.S. and around the world in countries of all levels of development. But there are different kinds of stress, and some are much worse than others.

Stress associated with goal achievement is very different from the chronic and continual stress that comes from experiencing constant shocks due to circumstances beyond individuals’ control. Feeling stressed about finishing a presentation for your boss is not the same as being stressed about having the electricity cut off because you can’t pay the bill. The former may have short-term costs, but is usually associated with efforts that allow individuals to complete higher levels of education and to meet other goals, which give them the capacity to make choices about the kinds of lives that they want to lead. That capacity, in turn, is associated with higher levels of life satisfaction in most countries and contexts.

Stress associated with goal achievement is very different from the chronic and continual stress that comes from experiencing constant shocks due to circumstances beyond individuals’ control.

Chronic stress, such as that typically faced by the poor as they constantly struggle to solve the crisis or the problem of the day, makes it very difficult to plan beyond the moment. For the U.S. poor, for example, common problems such as a sick child or a broken down car can result in the loss of a (typically low-quality) job and then a new spiral of associated problems, often exacerbated by lack of health care and other kinds of insurance. There can also be longer term costs. For example, Senhil Mullainathan and Eldar Shafir write about the lower levels of cognitive capacity to plan ahead that result from the chronic stress faced by the very poor in their well-known book, Scarcity.

Mid-life stresses are less in happy nations

Stress also has an age-related dimension. It mirrors the U-shaped curve which depicts the relationship between age and life satisfaction in most countries around the world. Life satisfaction typically hits its lowest level in middle age, and then ticks up again. The relationship between age and stress has an inverse U function, with stress levels highest at the middle age years, precisely when life satisfaction is lowest. Analyzing Gallup data, Julia Ruiz and I find that the inverse U for stress holds in roughly 75 percent of countries. As in the case of the U-curve in life satisfaction, a combination of biological and environmental factors—such as balancing careers, young children, and elderly parents, and/or aspirations aligning with reality as people enter the middle age years—seems to be at play. Also mirroring the U curve, the timing of the downturn in stress varies according to how naturally happy or unhappy people are, as well as to average levels of well-being in the countries where they live. People in happier countries tend to experience more happy and stress-free life years:

Chart - happier country, happier life

Less happy people and cohorts experience more stress in general and later into their middle age years:

Graham 21016002

This is particularly notable in the U.S., where the least optimistic cohort—uneducated, lower-income whites—are adding to increasing mortality rates via true markers of desperation: suicide and addiction to prescription drugs. And the deaths are primarily occurring in the middle age years, precisely where levels of stress are the highest. Mortality rates among poor blacks and poor Hispanics, cohorts which are on average much more optimistic about the future than poor whites, do not demonstrate the same patterns.

Higher gaps in stress levels of rich and poor in U.S.

The U.S. also stands out because despite relatively high average life satisfaction levels, gaps in levels of life satisfaction and stress between the poor and the rich are very large. The poor in the U.S. experience much more stress on a daily basis, for example, than do the poor in Latin America (a region which has relatively high levels of well-being but significantly lower levels of average income). The gap is in fact almost twice as large in the U.S. as in Latin America:

Chart - Gaps in stress scores between the poor and the rich: U.S. versus Latin American countries

The poor in the U.S. experience more stress, on average, in more unequal cites, as we’ve shown in an earlier memo on these pages. Rich and poor Americans also lower levels of social support in more unequal areas, precisely the kind of support that could help individuals cope with stress.

Given these stark trends, Soumya Chattopadhyay and I tested the good stress-bad stress hypothesis empirically, with a multivariate regression of Gallup data for the U.S. Not surprisingly, we found that stress levels are significantly and negatively associated with life satisfaction. But the size of the impact was perhaps even bigger than expected: in fact the negative coefficient on stress is much larger than were the positive coefficients on key correlates of well-being: income and health. In other words, the negative effects of stress outweigh the positive effects of income or health in general.

Chart - Happiness: stress hurts more than money helps

Adding interaction terms for stress and income and stress and education, we find that higher levels of income or education mitigate the negative effects of stress on life satisfaction. It may be that income and education simply makes it easier to manage stress. But it may also be that those with a higher income and/or education are much more likely to have stress associated with goal achievement (such as being in college or graduate school), while those with less income and education are more likely to experience stress associated with circumstances beyond their control (bad stress). Not only do the rich have better incomes, they may have better stress.

High costs of being poor

Poverty brings along with it a host of disadvantages that I refer to as the “high costs of being poor.” These are obstacles faced in daily life, such as the uncertainty that comes from lack of health insurance; or low quality, unstable employment. I discuss these findings in much greater detail in my forthcoming book for Princeton University Press: Happiness for All? Unequal Lives and Hopes in the Land of the Dream.

In addition to those well-documented costs, it turns out that the poor not only experience more stress than the rich on a daily basis, but it is also more likely to be “bad” stress, which can have long-term effects on the ability to plan for and invest in the future. Both the level and kind of stress experience in American today is therefore another dimension of the challenge we face in restoring social mobility and opportunity.