Abstract: The question of whether reducing socio-economic disparities promotes residents’ health has long been a topic of scholarly attention and debate.Previous literature has predominantly focused on the objective facet of income inequality,neglecting individuals’ subjective experiences,thereby narrowing our understanding of social development.The article posits that subjective happiness inequality is crucial in evaluating social development,given its impact on individual health enhancement.With using 2005—2021 CGSS data,considering issues such as omitted variables,measurement errors,and reverse causality,a series of regression results robustly show that,after controlling for income inequality,regions with higher happiness inequality tend to exhibit lower levels of residents’ self-rated health.Further analysis reveals that the mechanisms driving this relationship encompass both mechanical correlation effects and social contextual effects.The impact of social contextual effects is evident in both between-regional variations and within-regional fluctuations of happiness inequality.These findings enrich the existing literature on social inequality and residents’ health,offering valuable insights for the betterment of residents’ well-being.