The Inequality Cycle: How Psychology Helps Keep Economic Inequality in Place

Abstract

Inequality is perpetuated, in part, by the psychological and behavioral tendencies that arise from the social context of inequality. Cognitive biases lead most people to see themselves as middle class, even when that perception does not align with economic reality. Those who perceive themselves as economically advantaged tend to view inequality as fair and legitimate, often dismissing proponents of redistributive solutions as ill-informed. And unequal contexts increase risky behaviors that can be profitable to some but are more likely to be costly for most. This research program suggests an inequality cycle, in which inequality experienced today tends to reproduce itself.