Self-Esteem and Income Over Time.

ABSTRACT

There is robust evidence that people with higher incomes tend to have higher self-esteem, but little is known about how changes in income and self-esteem are related within individuals. Some theories predict that increased earnings lead to higher self-esteem, others that increased self-esteem leads to higher earnings, and still others that there should be no within-person associations between these variables. We tested these theories in 4-year longitudinal data from more than 4,000 adult participants from a Dutch representative sample. Results indicated significant between-person associations between income and self-esteem, consistent with prior research. Within-person effects suggested that increases in self-esteem are a function of previous increases in income more than the other way around. These links held when analyses controlled for employment status, and they generalized across gender, age, and educational background. Overall, the findings provide evidence for theories that consider self-esteem as both a source and a consequence of personal earnings.