The Macroeconomics of Stratification

Stratification economics, which has emerged as a new subfield of research on inequality, is distinguished by a system-level analysis. It explores the role of power in influencing the processes and institutions that produce hierarchical economic and social orderings based on ascriptive characteristics. Macroeconomic factors play a role in buttressing stratification, especially by race and gender. Among the macroeconomic policy levers that produce and perpetuate intergroup inequality are monetary policy, fiscal expenditures, exchange rate policy, industrial policy, and trade, investment, and financial policies. These policies interact with a stratification “infrastructure,” comprised of racial and gender ideologies, norms, and stereotypes that are internalized at the individual level and act as a “stealth” factor in reproducing hierarchies. In stratified societies, racial and gender norms and stereotypes act to justify various forms of exclusion from prized economic assets such as good jobs. For example, gendered and racial stereotypes contribute to job segregation, with subordinated groups largely sequestered in the secondary labor market where wages are low and jobs are insecure. The net effect is that subordinated groups serve as shock absorbers that insulate members of the dominant group from the impact of negative macroeconomic phenomena such as unemployment and economic volatility. Further, racial and gender inequality have economy-wide effects, and play a role in determining the rate of economic growth and overall performance of an economy. The impact of intergroup inequality on macro-level outcomes depends on a country’s economic structure. While under some conditions, intergroup inequality acts as a stimulus to economic growth, under other conditions, it undermines societal well-being. Countries are not locked into a path whereby inequality has a positive or negative effect on growth. Rather, through their policy decisions, countries can choose the low road (stratification) or the high road (intergroup inequality). Thus, even if intergroup inequality has been a stimulus to growth in the past, it is possible to choose an equity-led growth path.

The AMIGAS Model: Reconciling Prejudice Reduction and Collective Action Approaches Through a Multicultural Commitment in Intergroup Relations

Social psychology’s search for ways to address intergroup inequality has grappled with two approaches that have been considered incompatible: (a) the prejudice reduction approach, that argues that changing individual negative attitudes will undermine the basis for discrimination and lead to intergroup harmony; and (b) the collective action approach, that argues that social protest and activism can improve the position of disadvantaged groups. The problem is that efforts toward prejudice reduction may serve to suppress genuine efforts to change. We propose the Achieving Multicultural Integration of Groups Across Society (AMIGAS) model, in which a multicultural commitment is proposed as a driver of both improved intergroup evaluations and promotion of collective action for reduced inequality, especially in contexts where there are conditions for a respectful intercultural dialogue. The AMIGAS model is a theoretical advance in the field of intergroup relations and a basis for implementing effective egalitarian policies and practices.

Can cross-group contact turn advantaged group members into allies? The role of inequality-delegitimizing contact and interpersonal connection

Previous research shows that positive contact with members of disadvantaged groups can have positive, neutral, or negative effects on advantaged group members’ support of actions for social change towards more equality. The present work provides an experimental test of this effect and introduces two moderators which highlight the fundamental role of (a) communication about perception of the illegitimacy of intergroup inequality and (b) interpersonal connection with the contact partner. In two experiments ( N = 88 and N = 192), first-time cross-group contact was initiated between members of two universities that differ on social status. Results revealed that cross-group contact per se did not increase advantaged group members’ solidarity-based action to reduce inequality. However, cross-group contact did increase advantaged group members’ solidarity-based actions when the disadvantaged group partner engaged in inequality-delegitimizing contact by describing the intergroup inequality as illegitimate and when the advantaged group member reported a strong interpersonal connection with the disadvantaged contact partner.

The Impact of Self-Government, Comprehensive Land Claims, and Opt-In Arrangements on Income Inequality in Indigenous Communities in Canada

In Canada, self-government agreements, comprehensive land claims agreements, and opt-in arrangements allow Indigenous groups to govern their internal affairs and assume greater responsibility and control over the decision-making that affects their communities. We use difference-in-difference models to measure the impact of such agreements on average income and income inequality in Indigenous communities at the community level. In comparison with earlier work, we additionally use data from the 2016 Census. Our results suggest that comprehensive land claims agreements increase community-level average (log) household incomes by more than C$10 thousand (0.25 log points). Attainment of other agreement types does not increase community-level average incomes. Communities that attain a self-government agreement or an opt-in arrangement related to land management see a decrease in the Gini coefficient for income inequality by 2.0 to 3.5 percentage points. Standalone comprehensive land claims agreements are associated with a smaller decrease of 1.2 percentage points. We also study intergroup inequality and find that an opt-in arrangement increases within-community income disparity between Indigenous and non-Indigenous households.

Network Diffusion Under Homophily and Consolidation as a Mechanism for Social Inequality

Network externalities (where the value of a practice is a function of network alters that have already adopted the practice) are mechanisms that exacerbate social inequality under the condition of homophily (where advantaged individuals poised to be primary adopters are socially connected to other advantaged individuals). The authors use an agent-based model of diffusion on a real-life population for empirical illustration and, thus, do not consider consolidation (correlation between traits), a population parameter that shapes network structure and diffusion. Using an agent-based model, this article shows that prior findings linking homophily to segregated social ties and to differential diffusion outcomes are contingent on high levels of consolidation. Homophily, under low consolidation, is not sufficient to exacerbate existing differences in adoption probabilities across groups and can even end up alleviating intergroup inequality by facilitating diffusion.

Intergroup Inequality in Wealth Ownership in Rural India: Caste, Tribe and Religion

In India, the rural economy still remains crucially important in the economic wellbeing of the majority population. The low income and high poverty in rural areas are closely associated with unequal distribution of income-earning assets, particularly agricultural land and non-land capital assets. In this article, therefore, we try to understand the intergroup inequality in wealth ownership across caste, ethnic and religious groups in rural India based on the 2013 data from the All India Debt and Investment survey carried out by National Sample Survey Office. The results indicate high interpersonal wealth inequality so also the intergroup wealth inequality at the aggregate level and by type of assets in rural India. The impact of caste on the ownership of wealth clearly indicates high ownership among Hindu high caste and Hindu other backward caste at the cost of low wealth share or ownership of the SC/ST indicating the existence of graded inequality.

The Origins of Intergroup Resource Inequality Influence Children’s Decision to Perpetuate or Rectify Inequality

Previous studies have explored children’s intergroup resource allocation in the context of preexisting intergroup resource inequality. However, resource inequality between social groups often originates from different factors. This study explored the role of the origins of resource inequality on children’s intergroup resource allocations. In experiment 1, when there was no explicit origin of the intergroup inequality, children of different ages mainly allocated resources in an equal way and 5- to 6-year-olds showed ingroup bias. In experiment 2, we examined the influence of different origins of intergroup inequality and found that 5- to 6-year-olds perpetuated intergroup inequality when resource inequality was based on either a structural (regional disparity) or an internal factor (difference in performance). However, 10- to 11-year-olds rectified inequality or allocated equally when intergroup inequality was based on regional disparity and perpetuated resource inequality when intergroup inequality was based on performance difference. The origins of inequality appear to play an important role in children’s intergroup resource allocations, and older children can distinguish different origins of intergroup inequality in resource allocation.

Intergroup Inequality Heightens Reports of Discrimination Along Alternative Identity Dimensions

How do members of societally valued (dominant) groups respond when considering inequality? Prior research suggests that salient inequality may be viewed as a threat to dominant-group members’ self and collective moral character. However, people possess multiple social identities and may be advantaged in one domain (e.g., White) while concurrently disadvantaged in another domain (e.g., sexual minority). The present research tests whether individuals may reduce the moral-image threat of being societally advantaged in one domain by highlighting discrimination they face in other domains. Four experiments with individuals advantaged along different dimensions of inequality (race, social class, sexuality) reveal that making such inequality salient evokes greater perceived discrimination faced by oneself and one’s ingroups along other identity dimensions.

Intergroup inequality heightens reports of discrimination along alternative identity dimensions

How do members of societally-valued (dominant) groups respond when considering inequality? Prior research suggests that salient inequality may be viewed as a threat to dominant-group members’ self and collective moral character (e.g., Knowles et al., 2014). However, people possess multiple social identities and may be advantaged in one domain (e.g., White) while concurrently disadvantaged in another domain (e.g., sexual minority). The present research tests whether individuals may reduce the moral-image threat of being societally-advantaged in one domain by highlighting discrimination they face in other domains. Four experiments with individuals advantaged along different dimensions of inequality (race, social-class, sexuality) reveal that making such inequality salient evokes greater perceived discrimination faced by oneself and one’s ingroups along other identity dimensions.