Findings

Survival of the Richest

Kevin Lewis

March 06, 2020

The Desire for Social Status and Economic Conservatism among Affluent Americans
Adam Thal
American Political Science Review, forthcoming

Abstract:

Affluent Americans have disproportionate influence over policymaking and often use their power to advance conservative economic policies that increase inequality. I show that this behavior is partially driven by affluent Americans' desire for social status. First, I use a new survey scale to show that affluent Americans' desire for social status strongly predicts their level of economic conservatism. Second, I test my theory experimentally in the context of social media. On sites like Facebook, Instagram, and Twitter, affluent Americans compete for social status by sharing curated versions of their lives that highlight their upper-class lifestyle. When I randomly assign affluent Americans to experience this status competition, it causes them to become more economically conservative. The results help us understand the social and psychological origins of economic conservatism among affluent Americans, and provide the first evidence that social media encourages political behaviors that are conducive to inequality.


How the rich get richer: Affluence cues at universities increase the social class achievement gap
Wenwen Ni, Brianna Goodale & Yuen Huo
Social Psychology of Education, February 2020, Pages 125-141

Abstract:

Past research on socioeconomic status (SES) and test performance in higher education has highlighted the factors that depress performance among students from low-SES backgrounds. We complement this work by focusing on how cues of affluence and prestige in the physical environments of elite universities may boost performance among students from high-SES backgrounds, thereby exacerbating the existing performance gap between high and low-SES students. We randomly assigned 122 high-SES and 100 low-SES students to take a standardized test in an environment with affluence cues or one without affluence cues. We found a significant interaction between student-SES and testing environment, such that students from high-SES backgrounds outperformed students from low-SES backgrounds to a greater extent when affluence cues were present than when they were absent. These findings suggest that the physical environments of elite universities can contribute to the achievement gap between high and low-SES students. Theoretical and educational policy implications are discussed.


The Determinants of Income Segregation and Intergenerational Mobility: Using Test Scores to Measure Undermatching
Raj Chetty et al.
NBER Working Paper, February 2020

Abstract:

We analyze how changes in the allocation of students to colleges would affect segregation by parental income across colleges and intergenerational mobility in the United States. We do so by linking data from tax records on parents' incomes and students' earnings outcomes for each college to data on students' SAT and ACT scores. We find that equalizing application, admission, and matriculation rates across parental income groups conditional on test scores would reduce segregation substantially, primarily by increasing the representation of middle-class students at more selective colleges. However, it would have little impact on the fraction of low-income students at elite private colleges because there are relatively few students from low-income families with sufficiently high SAT/ACT scores. Differences in parental income distributions across colleges could be eliminated by giving low and middle-income students a sliding-scale preference in the application and admissions process similar to that implicitly given to legacy students at elite private colleges. Assuming that 80% of observational differences in students' earnings conditional on test scores, race, and parental income are due to colleges' causal effects - a strong assumption, but one consistent with prior work - such changes could reduce intergenerational income persistence among college students by about 25%. We conclude that changing how students are allocated to colleges could substantially reduce segregation and increase intergenerational mobility, even without changing colleges' educational programs.


Reconsidering the 'Meritocratic Power of a College Degree'
Dirk Witteveen & Paul Attewell
Research in Social Stratification and Mobility, forthcoming

Abstract:

Previous research has shown that the intergenerational transmission of advantage disappears once individuals obtain a bachelor's degree. This is known as the equalization thesis: the 'meritocratic power' of a college degree. This paper revisits the question of origin-destination association among college graduates. We improve on earlier studies by using three large sample (40,000+) of the National Survey of College Graduates, consisting of birth cohorts between 1938 and 1985. Contrary to the equalization thesis, we find that parental education and parental income are associated with substantially higher post-college incomes. An individual's own attainment only partially mediates the association through the type of college attended, but not through attaining an advanced degree. The consistency of the origin-destination estimates across three decades supports a replication thesis of mobility.


Long-run Trends in the U.S. SES-Achievement Gap
Eric Hanushek et al.
NBER Working Paper, February 2020

Abstract:

Rising inequality in the United States has raised concerns about potentially widening gaps in educational achievement by socio-economic status (SES). Using assessments from LTT-NAEP, Main-NAEP, TIMSS, and PISA that are psychometrically linked over time, we trace trends in achievement for U.S. student cohorts born between 1954 and 2001. Achievement gaps between the top and bottom quartiles of the SES distribution have been large and remarkably constant for a near half century. These unwavering gaps have not been offset by improved achievement levels, which have risen at age 14 but have remained unchanged at age 17 for the past quarter century.


Globalization and top income shares
Lin Ma & Dimitrije Ruzic
Journal of International Economics, forthcoming

Abstract:

This paper documents empirically that access to global markets is associated with a higher executive-to-worker pay ratio within the firm. It then uses China's 2001 accession to the World Trade Organization as a trade shock to show that firms that exported to China prior to 2001 subsequently exported more, grew larger, and grew more unequal in terms of executive-to-worker pay. To analytically and quantitatively evaluate the impacts of globalization on top income inequality, this paper builds a model with heterogeneous firms, occupational choice, and executive compensation. In the model, executive compensation grows with the size of the firm, while the wage paid to ordinary workers is determined in a country-wide labor market. As a result, the extra profits earned in the foreign markets benefit the executives more than the average workers. We calibrate the model to the U.S. economy and match the income distribution closely in the data. Counterfactual exercises suggest that trade and FDI liberalizations can explain around 44% of the surge in top 0.1% income shares in the data between 1988 and 2008.


Wealth Creation, Wealth Dilution and Demography
Christa Brunnschweiler, Pietro Peretto & Simone Valente
Journal of Monetary Economics, forthcoming

Abstract:

Demographic forces are crucial drivers of macroeconomic performance. Yet, existing theories do not allow demography to respond to fundamentals and policies while determining key macroeconomic variables. We build a model of endogenous interactions between fertility and innovation-led productivity growth that delivers empirically consistent co-movements of population, income and wealth. Wealth dilution and wage dynamics stabilize population through non-Malthusian forces; demography determines the ratios of labor income and consumption to financial wealth. Shocks that reduce population size, like immigration barriers, reduce permanently the labor share and the mass of firms, creating prolonged stagnation and substantial intergenerational redistribution of income and welfare.


Education and Attitudes toward Redistribution in the United States
John Bullock
British Journal of Political Science, forthcoming

Abstract:

Although scholars have studied education's effects on many different outcomes, little attention has been paid to its effects on adults' economic views. This article examines those effects. It presents results based on longitudinal data which suggest that secondary education has a little-appreciated consequence: it makes Americans more opposed to redistribution. Placebo tests and other analyses confirm this finding. Further investigation suggests that these conservative effects of education operate partly by changing the way that self-interest shapes people's ideas about redistribution.


A Brighter Future: The Effect of Social Class on Responses to Future Debt
Harrison Schmitt et al.
Journal of Social and Political Psychology, 2020, Pages 78-107

Abstract:

The present study serves as an exploratory investigation of the role of social class in responses to the threat of future debt. Previous work has shown that individuals of high and low subjective social class differ in the ways that they respond to a broad range of threats and uncertainties about the future. Across three studies, we found that lower social class individuals expect more future debt and suffer greater attendant stress than higher class individuals (Study 1). We found that experimental manipulations of debt salience increased stress for lower class and not for higher class individuals (Studies 2-3). Likewise, we found that higher class individuals experienced higher affect balance and perceptions of personal control when the possibility of future debt was made salient, specifically as a function of decreased fatalism about future debt (Study 3). These three studies reveal yet another situation in which individuals of lower and higher social class respond differently to threat, and serve as an important step toward understanding the psychological ramifications of rising debt in the United States.


 

Incentivizing the Missing Middle: The Role of Economic Development Policy
Carlianne Patrick & Heather Stephens
Economic Development Quarterly, forthcoming

Abstract:

The shrinking middle class and increasing income polarization in the United States are issues of concern to policy makers and others. Economic development incentives are a key policy tool used at the state and local levels to promote local economic growth, and, presumably, provide employment opportunities. However, these incentives may have unintended consequences that may be contributing to the decline of the middle class. The authors combine detailed industry-level detail on incentives with proprietary county-level industry employment data and two methods for defining middle-class industries. Using an instrumental variable approach, the authors estimate how differential economic development policies affect middle-class jobs. The authors find evidence that incentivizing creative-class and high-wage industries may be contributing to the hollowing out of the middle class. Without hurting employment in other industries, targeting working-class and middle-wage industries alleviates this trend, while reducing incentives on creative-class and high-wage industries could help increase working and middle-class employment.


 

Estimated car cost as a predictor of driver yielding behaviors for pedestrians
Courtney Coughenour et al.
Journal of Transport & Health, forthcoming

Introduction: Pedestrian crashes are not equitably distributed; people of color and males are overburdened. The aim of this study was to examine if driver yielding behavior differed based on gender and skin color of the pedestrian, and the estimated car cost at two midblock crosswalks in the Las Vegas metropolitan area.

Methods: One white and one black female and one white and one black male crossed the intersection in a similar, prescribed manner. Crossings were video recorded. Driver yielding behavior was documented. The cost of car was estimated by cross referencing manufacturing websites and averaging the high and low values of estimated private sale. Generalized linear mixed model was applied, nesting within crossing attempt and within streets.

Results: Of 461 cars, 27.98% yielded to pedestrians. Cars yielded more frequently for females (31.33%) and whites (31.17%) compared to males (24.06%) and non-whites (24.78%). Cost of car was a significant predictor of driver yielding (OR = 0.97; p = 0.0307); odds of yielding decreased 3% per $1000 increase.


Social class and self-concept consistency: Implications for subjective well-being and felt authenticity
Helen Boucher
Self and Identity, forthcoming

Abstract:

Current accounts of social class (SES) hold that for upper-SES individuals, material advantages promote an orientation to the self and tendency to anchor behavior on internal states (e.g., traits), while for lower-SES individuals, fewer resources promote an orientation to others and responsiveness to the context. I extend this view to the domain of self-perception, demonstrating across two studies that upper-SES individuals express greater consistency in their self-views across contexts than lower SES-individuals, and that self-concept consistency is more strongly tied to subjective well-being among upper- than lower-SES individuals. In Study 2, I show that self-concept consistency is more strongly connected to felt authenticity among upper- than lower-SES individuals. I offer potential directions for future research in the General Discussion.


Modelling the On-going Natural Selection of Educational Attainment in Contemporary Societies
Ze Hong
Journal of Theoretical Biology, forthcoming

Abstract:

There has been substantial increase in education attainment (EA) in both developing and developed countries over the past century. I present a simulation model to examine the potential evolutionary trajectories of EA under current selective pressure in western populations. With the assumption that EA is negatively correlated with fitness and has both a genetic component and a cultural component, I show that when prestige-biased transmission of the EA (i.e. people with more education are more likely to be copied) is present, the phenotype of EA is likely to keep increasing in the short term, yet the genetic component of EA may undergo a constant decline and become the limiting factor in further phenotypic increase.


Work Alienation and its Gravediggers: Social Class, Class Consciousness, and Activism
Jeremy Sawyer & Anup Gampa
Journal of Social and Political Psychology, 2020, Pages 198-219

Abstract:

Work activity is central to human psychology. However, working conditions under capitalist socioeconomic relations have been posited as psychologically alienating. Given the negative impact of work alienation on well-being and mental health, we conducted two studies of the relations between social class, work conditions, and alienation. We also examined factors that might counteract alienation - class consciousness and activism. The utility of a Marxist measure of social class - based on objective work relations - was compared with that of SES and subjective class measures. Study 1 surveyed 240 U.S. adults from diverse socioeconomic backgrounds using Amazon's Mechanical Turk; Study 2 was a replication with 717 adults recruited via a sampling company. Across studies, alienation was predicted by perceived work exploitation, poor work relationships, and lack of self-expression, meaningfulness, self-actualization, autonomy, and intrinsic motivation at work. Only the Marxist class measure - not SES or subjective class measures - predicted alienation and alienating work conditions across studies. Working-class participants experienced more alienating work conditions and greater alienation. Alienation was correlated with class consciousness, and class consciousness was associated with activism. While SES measures have dominated the psychological study of social class, results suggest benefits to integrating Marxist measures and conceptions of social class.


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