More than self-interest: Why different classes have different attitudes to income inequality

The connection between social class and political preferences is among the most well established in the social sciences. This association is typically taken as prima facie evidence of economic self-interest: Classes hold different attitudes, values, and party preferences because they have different economic interests. However, this assumption has rarely been tested empirically. In this article, we use survey data from 18 West European countries to examine why classes differ on a central aspect of political preferences, namely their views on the desirability of income inequality. We find that only a moderate proportion of differences between employee classes in support for redistribution can be accounted for by contemporary differences in resources and risks; differences in economic interests to some degree account for the anti-redistributive preferences of the professional middle classes compared with the working class. However, the preferences of the self-employed have a different explanation; autonomy is a better explanation of the right-wing preferences of the self-employed compared with the working class.     

DO POSITIONAL CONCERNS DESTROY SOCIAL CAPITAL: EVIDENCE FROM 26 COUNTRIES

Research on the effects of positional concerns on individuals' attitudes and behavior is sorely lacking. To address this deficiency, we use the International Social Survey Programme 1998 data on 25,000 individuals from 26 countries to investigate the impact of relative income position on three facets of social capital: horizontal and vertical trust as well as norm compliance. Testing relative deprivation theory, we identify a deleterious positional income effect for persons below the reference income, particularly for their social trust and confidence in secular institutions. Also often a social capital‐lowering effect of relative income advantage occurs, while a rise in absolute income almost always contributes positively. These results indicate that a rise in income inequality in a society too large is rather detrimental to the formation of social capital. (JEL Z130, I300, D310)     

Social capital and economic integration of migrants in urban China

Based on data from a 2005 survey conducted in Shanghai, China, this research examines the role of social capital in income inequality between rural migrants and urbanites. We find strong income return on social capital, in particular on social capital from strong ties. We also observe a great disparity in social capital possession between rural migrants and urban local residents. Although social capital from strong ties seems to be more important for rural migrants than for urbanites, local ties and high-status ties do not seem to benefit rural migrants. Hence, migrants not only suffer severe social capital deficits but also capital return deficits. Given the strong income returns on social capital and the substantial differences in access to and return on social capital between migrants and urban residents, social capital is consequently found to explain a large part of the income inequality between the two groups. Overall, our findings reveal macro-structural effects on the role of social capital in labor market stratification. In China, the lack of formal labor market mechanisms continues to create both a strong need for and opportunities for economic actions to be organized around informal channels via social relations. Yet, the long-standing institutional exclusion of migrants caused by the household registration system has resulted in pervasive social exclusion and discrimination which have substantially limited rural migrants’ accumulation and mobilization of social capital. Under these conditions, social capital reinforces the economic inequality between migrants and urban residents in China. Such empirical evidence adds to our understanding of the role of social capital in the economic integration of migrants and in shaping intergroup inequality in general.     

Middle Class Identity in the Modern World: How Politics and Economics Matter

It is widely accepted that people tend to identify with the middle classes regardless of their social class position. Nevertheless, this “middle class identity bias” is not equally prominent in all western democracies. The goal of this article is to assess the role of political and economic conditions in shaping this phenomenon. By exploring the relationship between class identity and national context in 15 modern societies, I address two main questions: (1) how individual‐level income affects where people place themselves in the class system, and (2) how national political and economic context affects this relationship. In doing so, I offer several important findings. First, although there is a positive relationship between income and class identification in all 15 societies, middle class identification is weakest when income inequality is high. Consistent with previous findings, the results suggest that economic development has a positive impact on class identity. The results also uncover a role for political ideology by suggesting a lingering affect of Communist rule. Even after controlling for economic development and income inequality, respondents in former Communist countries are more likely than others to identify as belonging to a low social class.     

The Social Inclusion and Inequality Nexus: EU versus non‐EU migrants

This study examines the relationship between social inclusions of migrant and income inequality. Both positive and negative impacts of social inclusion on income inequality have been observed in the previous literature. This study specifically considers two types of migration flow: migration flow from EU and migration flow from non‐EU. The aim of this article is twofold: 1) is there a strong association between social inclusion of migrants and income inequality, 2) is there any different impact of social inclusion of two types of migrants (EU vs non‐EU)? Using data from 33 mainly European countries over the period 2003‐2015 and controlling for savings rate, arable land rate and age‐dependency ratio, our results indicate that there is a significant negative relationship between social inclusion and income inequality. In particular, we find that social inclusion from non‐EU migrants significantly reduces income inequality compare with EU migrants.     

Rurality and Income Inequality in the United States, 1975–2015

Recent events have focused attention on the perceived widening of the economic divide between urban and rural areas, and on the continued rise of national income inequality. We demonstrate that, in fact, the average income gap between urban (metropolitan) and rural (nonmetropolitan) households has not risen over the past 40 years, and makes virtually no contribution to national income inequality. Rising national inequality is driven by rising inequality within both urban and rural America, not by an urban/rural divergence. As is well known, the growing dispersion of household money income is partly driven by rising wage inequality, particularly in urban areas. Less well recognized is the role played by other income sources. We show that a decline in the progressivity of the distribution of social security payments and cash transfers, and an increase in the regressivity of the distribution of retirement incomes, have jointly made a comparably large contribution to rising income inequality. At the same time, the share of income from self-employment has declined, particularly in rural America, and because self-employment income is very unequally distributed, its diminution has retarded the growth of rural inequality. In 2014–15, however, rural inequality increased, cutting the urban/rural inequality gap in half.     

Social Class,Economic Inequality,and the Convergence of Policy Preferences: Evidence from 24 Modern Democracies

Using data from the World Values Survey and national‐level indicators for 24 modern democracies, we assess the influence of social class and economic inequality on preferences for government responsibility. We improve on previous research by using multilevel models that account for differences in attitudes both within (i.e., over time) and across countries. Our findings are consistent with the economic self‐interest hypothesis. Specifically, working class individuals, who tend to gain the most from government intervention because of their low and often more precarious economic position, are more likely than others to support government intervention. We also find a positive relationship between national‐level income inequality and support for government intervention. As income inequality rises, its social ills tend to be more pervasive, resulting in public opinion becoming more supportive of governments taking responsibility for their citizens. We further demonstrate that inequality moderates the relationship between social class and attitudes. Although the effect of income inequality is positive for all social classes, attitudes across social classes become more similar as inequality rises. Utilisant les données de World Values Survey et indicateurs de niveau national, nous évaluons l'influence de la classe sociale et l'inégalité économique sur les préférences en matière de responsabilité du gouvernement dans 24 démocraties modernes. Notre analyse se améliore sur la recherche précédente en utilisant des modèles à plusieurs niveaux qui tiennent compte des différences dans les attitudes au sein (ce est à dire, au fil du temps) et entre les pays. Nos résultats sont cohérents avec l'hypothèse d'auto‐ intérêt économique. Par exemple, les travailleurs ‐ qui ont tendance à bénéficier plus quand le gouvernement intervient dans l’économie en raison de leurs faibles revenus et souvent position plus précaire ‐ sont plus susceptibles que d'autres à un soutien responsabilité du gouvernement. Nous constatons également une relation positive entre l'inégalité des revenus au niveau national et le soutien à l'intervention du gouvernement. Comme l'inégalité des revenus se élève—et ses maux sociaux ont tendance à être plus répandue—l'opinion publique devient plus favorable des gouvernements assument la responsabilité de citoyens. Tout aussi important, cependant, nous démontrons également que la relation entre la social classe et les préférences pour la responsabilisation du gouvernement diffèrent par la quantité de l'inégalité des revenus dans un pays. Bien que l'effet de l'inégalité des revenus est positif pour toutes les classes sociales, les différences dans les attitudes de la classes sociale convergent que l'inégalité augmente.     

INCOME INEQUALITY: THE IMPLICATIONS OF ECONOMIC STRUCTURE AND SOCIAL CONDITIONS

During the past few decades income inequality has been increasing in the United States and other developed nations, and is having major social consequences. In this study county-level data for the United States was analyzed to test the relative importance of three alternative approaches for explaining increased levels of inequality. These three approaches include economic structure, social conditions, and a model that maintains that both social conditions and inequality are a function of economic structure. The results revealed that social conditions were much more strongly related to inequality than economic structure and little support was found for the theoretical model. The two social conditions most strongly related to inequality included female employment and the percent of female-headed households. Counties with high levels of female employment tended to have low levels of inequality, while counties with high proportions of female-headed households tend to have high levels of inequality. The implications of these findings are discussed.     

Social capital and the reproduction of economic inequality in polarized societies

This paper explores the idea that the distribution of wealth across social groups fundamentally affects the evolution of economic inequality. By providing microfoundations suitable for this exploration, this paper hopes to enhance our understanding of when social forces contribute to the reproduction of economic inequality. In tackling this issue, this paper offers contributions in two domains. First, it models social capital as a real capital asset with direct use and collateral values. Second, it extends the concepts of identity, alienation and polarization originally advanced by Esteban and Ray (Esteban, J.M. and Ray, D.: On the measurement of polarization, Econometrica 62(4) (1994), 819–851). This generalization permits us to consider the multiple characteristics that shape social identity, inclusion and exclusion. It also underwrites a higher-order measure of socio-economic polarization that permits us to explore the hypothesis that economic inequality is most pernicious and persistent when it is socially embedded. Holding constant the initial levels of economic polarization and wealth inequality, we show that higher socio-economic polarization increases subsequent income and wealth inequality. Far from being a distributionally neutral panacea for missing markets, social capital in this model may itself generate exclusion and deepen existing economic cleavages.     

Individuelle Qualifikation, berufliche Schlie?ung oder betriebliche Lohnpolitik – was steht hinter dem Anstieg der Lohnungleichheit?

This article examines the change of income inequality in the last few years. Two topics are in the center of the analysis: Which factors drive mainly the increase of income inequality ?C an increased demand for higher qualifications or processes of social closure? At which level does the change of income inequality take place ?C at the individual, the occupational or at the firm level? It turns out that economic theories like the thesis of the ??skill ?C biased technological change?? and sociological approaches as the theory of social closure both deliver important insights in the ongoing processes underlying the increase of income inequality. Beyond that it can be shown that firms play a major role in shaping these processes ?C a fact that has been widely neglected by both theoretical approaches.     

Poverty and economic development: not as direct as it may seem

The relationships among various subsets of economic development, poverty, crime, and/or income inequality have been separately investigated in several theoretical and empirical studies. However, there has been very little empirical analysis on the interdependence among all these variables in one framework. This paper examines the causality between economic development and poverty while incorporating crime and inequality. It employs a co-integration test, a 4-variable vector autoregressive (VAR) model, and a Granger test in the US over the period 1959–2001. Findings reveal a feedback loop mechanism between economic development, poverty, and crime. Interestingly, income inequality as measured by the Gini coefficient has no important impact on any of the variables.     

Income Inequality,Globalization, and the Welfare State: Evidence from 23 Industrial Countries, 1990–2009

The debate regarding the welfare state–weakening effect and the income inequality‐increasing effect of globalization remains a contentious issue among stratification scholars. For some, globalization increases income inequality, while for others, globalization has no, or a negligible, effect on income inequality. This study brings new evidence to bear on this debate by separately investigating effects of multiple indicators of globalization (international trade, foreign direct investment [FDI] and immigration), and of welfare state generosity (government social‐protection spending) on (1) income inequality before taxes and transfers and (2) income inequality after taxes and transfers, using data from 23 Organisation for Economic Co‐operation and Development (OECD) countries over 1990–2009. First, results show a positive effect of international trade, a negative effect of immigration, but no effect of FDI and government social‐protection spending on income inequality before taxes and transfers. Second, results show no effect of the globalization indicators but a negative effect of government social‐protection spending on income inequality after taxes and transfers. These findings suggest that (1) globalization has inequality‐increasing effects depending on measures of income inequality; (2) the welfare state, in many OECD countries, continues to shape income distribution; and (3) in contrast with the popular narrative, immigration may decrease income inequality.     

Ökonomische und nicht-ökonomische Gefahren für Demokratien

Muller (1995a) claimed that during the 1960s and 1970s countries with (high) income inequality are more likely to face decline in democracy than countries with lower income inequality. This article uses new data to compare the negative impact of two economic determinants (income inequality, inflation) and two non-economic determinants (percent of Islamic population, world system periphery) on democracy. It is found that neither income inequality nor world system periphery does contribute to the explanation of the decline in democracy. Only inflation offers a tentative explanation for decline in democracy. The validity of the results is lessened by sample problems. Especially the data from communist countries appear to be less reliable.     

The impact of privatization and change of social security systems upon living conditions of east German households

After the collapse of the communist regime East Germany became the prime example of a ‘Big Bang’ strategy of transformation. Rapid marketization and privatization brought about a disastrous economic downturn. But immense transfer payments from West Germany and the import of a well‐developed system of social security institutions accompanied the transformation, minimizing social costs. This article summarizes the main developments and analyzes their impact on the living conditions of East German households. The indicators presented cover labour force participation, business activities and economic inactivity in the household context; relative income position, poverty, income inequality and the self‐assessment of income changes; consumption and livelihood. The article reveals both the different experiences of gains and losses within East German society and the (in some respects) advantageous position of East German households compared with households in Hungary, Poland, and the Czech and Slovak Republics.     

Real household income and attitude toward immigrants: an empirical analysis

Previous studies have analyzed the (aggregate) effects of unemployment on attitudes towards immigrants and on right-wing crimes. In this paper, we investigate the effects of economic prosperity on attitudes towards immigrants, focusing not only on unemployment status but also on real household income. Using panel data from the German Socioeconomic Panel on around 33,000 individuals over the period 1992–2004 we find a robust negative relationship between real personal household income and self-declared concern about immigrants, both in levels and first differences. Both job loss and income reduction concerns about immigration. Our findings document an interesting interaction between economic variables and social attitudes which does not depend on economic growth per se but on its capacity to generate higher economic wellbeing at individual level, not only for unemployed people but also for those in employment, who may face a fall in real income during economic downturns.     

Is America coming apart? Socioeconomic segregation in neighborhoods,schools, workplaces,and social networks, 1970–2020

As income inequality in the United States has reached an all-time high, commentators from across the political spectrum warn about the social implications of these economic changes. America, they fear, is “coming apart” as the gap between the rich and poor grows into a fault line. This paper provides a comprehensive review of empirical scholarship in sociology, education, demography, and economics in order to address the question: How have five decades of growing economic inequality shaped America's social landscape? We find that growing levels of income inequality have been accompanied by increasing socioeconomic segregation across (1) friendship networks and romantic partners, (2) residential neighborhoods, (3) K-12 and university education, and (4) workplaces and the labor market. The trends documented in this review give substance to commentators' concerns: compared to the 1970s, rich and poor Americans today are less likely to know one another and to share the same social spaces. The United States is a nation divided.     

“Left Behind?” Financialization and Income Inequality Between the Affluent,Middle Class,and The Poor

There is increasing scholarly evidence that financialization has contributed to rising income inequality, especially by concentrating income among the affluent and rich. There is less empirical research examining who is losing out to the affluent. This paper fills this gap by examining how three measures of financialization (finance, insurance, and real estate or FIRE employment; credit expansion; and financial crises) affect upper-tail (measured as the ratio between the 90th and 50th income percentiles) and lower-tail (measured as the ratio between the 50th and 10th income percentiles) income inequality. Using concepts from economic sociology and the social stratification literature, I develop a perspective that links financialization to income inequality by creating more unequal market incomes while simultaneously reducing redistribution and social transfers. I analyze disposable household income data (after taxes and transfers) from the Luxembourg Income Study (LIS) and other public sources like the OECD from 16 affluent nations between the years 1981 and 2011, and I use an unbalanced panel design due to LIS data coverage. I find that the relative incomes of both the middle class and the poor are hurt by financialization (strongest evidence tied to FIRE employment); however, relative incomes of the poor are especially sensitive to financialization.     

Local Solutions to Inequality: Steps Toward Fostering a Progressive Social Movement

Over the past four decades, inequality of income, wealth, and power have become increasingly extreme in the United States. The triumph of a neoliberal agenda to reduce taxes, deregulate the economy, and promote international trade has undermined the economic status of the middle class, increased poverty, and led to a concentration of wealth. This nation has gone through such periods before, followed by progressive movements that have realigned economic and political forces. I argue that we may be at a point where a new progressive social movement is about to emerge and I point out several areas where rural sociologists are working, such as local food systems, that reflect a reorientation of social values supporting such a movement. Promoting local food systems and similar locality‐based enterprises can foster economic relationships embedded in multistranded social relationships and contribute to progressive change through reducing the central role of large corporations in our daily lives. Building on Busch's (1999) concept of Leviathan, I identify the roles of researchers and community activists in which rural sociologists can work to democratize social, economic, and political relationships in society.     

Inequality,integration, and policy: issues and evidence from EMU

Simple theoretical arguments imply that while economic integration may or may not increase income inequality and volatility, it certainly makes it difficult for National governments to conduct independent fiscal policies and to enforce income redistribution schemes. Controlling for country-level income variation, available data suggest that Europe’s Economic and Monetary Union (EMU) was associated with a small but significant increase in disposable income inequality, and that this was in turn accounted for by less generous social policies.     

Die stille Umverteilung

During the last decades income inequality has risen again in western societies. Whereas empirical indicators and statistical data show in detail the changes in income distribution, sociology has no adequate knowledge about the corresponding micro-level motives. The globalization of value chains, technological change, the increasing occupational participation of women, the decline of union participation and tax reform are considered to be the main factors relevant for the increase in income inequality. It is shown that these variables do not sufficiently explain the micro level of organizational allocation structures, which are mainly experienced as budgetary exigencies. Not only business organizations but also public administrations, welfare organizations, schools, universities and health care organizations are governed by budgets in a similar way. It is hypothesized that budgeting functions as a micro-mechanism to transform economic stagnation into income inequality at a societal level. Delegation of responsibility and the creation of consensus are discussed to be central goals of budgeting in enterprises, social administrations, educational and health organizations and the effects of budgeting on the distribution and the allocation of resources are analyzed.