Broken Ties: Black Americans’ Diminished Return of Socioeconomic Status on Subjective Well-being

Minorities' Diminished Return (MDR) theory suggests systematically smaller effects of socioeconomic status (SES) indicators on the health of non-white populations compared to white in the United States (US). We test whether MDR theory holds with regard to subjective well-being (SWB) by investigating racial differences in the association between SES and SWB in the US using data from the Gallup Healthways survey. Our analysis included 126,669 non-Hispanic Black and white US adults. A composite SES variable comprised of financial, education, and occupation indicators was the independent variable. Life satisfaction, measured by the Cantril Ladder, was the dependent variable. Covariates included self-reported health problems, age, sex, and marital status. Race/ethnicity was tested as a moderator of the primary relationships. We estimated linear regression models in the overall sample, with and without race x SES interactions, and examined the associations between SES and SWB stratified by race/ethnicity. Findings demonstrated the strength of associations between SES and SWB differed among Black and white sub-groups. NH white adults experienced consistent increases in life satisfaction across all SES groups, while NH Black adults only begin to benefit from increasing SES when they transition from the low middle SES group to the higher SES groups. MDR theory is a relevant framework to understand potential racialized effects of SES on SWB. Multilevel policy interventions, including anti-discrimination policies, could begin to address the broken ties between SES and SWB in the US. Additional research is needed on whether MDR theory holds for other SWB domains and other SWB assets.