The widening income gap between the rich and the poor has important social and economic implications. Governmental-level income redistribution presents an opportunity to reduce income inequality through tax and welfare policies. Redistributing income from the rich to the poor may improve societal well-being. The current studies examined the extent to which change in income redistribution relates to life satisfaction along with the moderating factors concerning this relation. Using a nationally-representative sample of 57,932 German respondents from 16 German states across 30 years (Study 1) and a world-wide sample of 115,293 respondents from 35 countries across 24 years (Study 2), I found that increases in state- and national-level income redistribution over time were associated with greater life satisfaction. The models predicted that a 10% reduction in Gini through income redistribution in Germany increased life satisfaction to the same extent as an increase of €12,715 (or about USD$18,185) in annual income (Study 1), and a 5% reduction in Gini through income redistribution increased life satisfaction to the same extent as a USD$1,582 increase in GDP per capita (Study 2). This association was positive across levels of income, amount of tax paid, political attitude, egalitarian value, economic mobility, and cultural values. These findings suggest that income redistribution is linked to greater life satisfaction for most people. These correlational findings provide initial evidence that redistribution policies may play an important role in improving societal well-being.
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