The Spirit Level
Why More Equal Societies Almost Always Do Better
by Richard Wilkinson and Kate Pickett
published by Penguin in March 2009.
It is reviewed in the Guardian. While one always has to be careful with attributing simultaneous statistical changes to a causal relationship, the wealth of data pointing in the same direction suggests that inequality really is bad for everybody's wellbeing.
What needs explaining is the observation that even richer people are suffering in unequal societies (US and UK always at the top of these charts!). The one hypothetical explanation that might account for that paradox is status anxiety. When you live on such a steep slope that the mere thought of sliding down makes you sick or drives you to crimes, life is unhealthy even at the top.