Getting It

Kevin Lewis

May 13, 2022

Health improvements impact income inequality
Rainer Kotschy
Journal of the Economics of Ageing, forthcoming

This paper investigates whether and to what extent long-run trends in population health affected income inequality in the United States over the period 1960–2000. To isolate exogenous variation in health over time, the analysis exploits the sharp decline in cardiovascular disease mortality across states that originated from medical advances in the treatment and prevention of these diseases after 1960. The results demonstrate that health improvements contributed to rising income inequality through mechanisms related to education. 

Indulgent Consumption Signals Interpersonal Warmth
Qing Tang, Kuangjie Zhang & Xun (Irene) Huang
Journal of Marketing Research, forthcoming

People who engage in indulgent consumption often are viewed as having poor self-control. In this research, however, eight studies provide converging support that indulgent consumption can have a positive effect: signaling interpersonal warmth. Specifically, consumers who post indulgent (vs. healthy) consumption content on social media are perceived as warmer (Study 1). The effect occurs because consumers believe that indulgent consumption is what people genuinely prefer, so indulgent (vs. healthy) consumption seems more authentic, and authenticity mediates the effect of indulgent consumption on perceived warmth (Studies 2a and 2b). Providing additional support for the authenticity mechanism, we show that the positive effect of indulgent (vs. healthy) consumption on perceived warmth is attenuated when the indulgent content is sponsored, which casts doubt on its authenticity (Study 3). We further show that sharing indulgent consumption can increase the appeal of a service provider among consumers who are seeking a warm service provider but it occurs only when the content is not sponsored (Studies 4a and 4b). Finally, the effect of sharing indulgent (vs. healthy) consumption has downstream consequences for audience engagement on Instagram (Studies 5a and 5b). This research sheds light on how to cultivate interpersonal warmth in marketing communication and personal branding. 

Who Benefits when a Country Becomes More Economically Free? (Does Anybody Lose?)
Justin Callais & Andrew Young
Texas Tech University Working Paper, April 2022

We explore the relationship between economic freedom and inequality. We employ the Fraser Institute’s Economic Freedom of the World (EFW) index and country-level (i) decile income shares, (ii) decile income levels, and (iii) Gini coefficients. We address concerns for endogeneity and nonlinearity using matching methods. We report that economic freedom is a tide that raises boats at all income levels. We also report that increases in economic freedom cause increases in income inequality. While those increases are associated with gains in the top income decile, they are modest. We conclude that increased economic freedom leads to significant gains across the income distribution.

Intersectionality in emotion signaling and recognition: The influence of gender, ethnicity, and social class
Maria Monroy, Alan Cowen & Dacher Keltner
Emotion, forthcoming

Emotional expressions are a language of social interaction. Guided by recent advances in the study of expression and intersectionality, the present investigation examined how gender, ethnicity, and social class influence the signaling and recognition of 34 states in dynamic full-body expressive behavior. One hundred fifty-five Asian, Latinx, and European Americans expressed 34 emotional states with their full bodies. We then gathered 22,174 individual ratings of these expressions. In keeping with recent studies, people can recognize up to 29 full-body multimodal expressions of emotion. Neither gender nor ethnicity influenced the signaling or recognition of emotion, contrary to hypothesis. Social class, however, did have an influence: in keeping with past studies, lower class individuals proved to be more reliable signalers of emotion, and more reliable judges of full body expressions of emotion. Discussion focused on intersectionality and emotion. 

Restless in an Unequal World: Economic Inequality Fuels the Desire for Wealth and Status
Zhechen Wang, Jolanda Jetten & Niklas Steffens
Personality and Social Psychology Bulletin, forthcoming

Building on theories explaining social outcomes of economic inequality, our research examined the psychological impact of inequality on the desire for wealth and status. Our studies provide both experimental (Studies 1 and 3, Ns = 321 and 596) and correlational (Study 2; N = 141,477 from 73 countries and regions) evidence that higher inequality heightens people’s desire for wealth and status. Notably, this effect of inequality on desire is independent of the influence of societal wealth. Moreover, our results reveal social class differences in why inequality fuels motivations: Lower-class individuals are more likely to respond to higher inequality with a heightened desire reflecting self-improvement concerns, whereas upper-class individuals are more likely to respond with a heightened desire reflecting social comparison concerns. These findings suggest that higher inequality creates an environment of restlessness in which both the poor and the rich feel obliged to seek wealth and status, albeit for different reasons. 

Does misery love company? An experimental investigation
Katherine Farrow, Gilles Grolleau & Lisette Ibanez
Oxford Economic Papers, April 2022, Pages 523–540

The conventional wisdom summarized in the adage ‘misery loves company’ suggests that suffering can be made easier to bear if it is also shared by others. Given increasing interest in subjective well-being and happiness as constituents of national wealth and priorities in policy-making and organizational management, we empirically investigate the validity of this phenomenon in order to explore whether it may be possible to mitigate decreases in subjective well-being simply by leveraging social comparison. We implement an experimental survey designed to gauge the suitability of this strategy on a representative sample of approximately 2,000 US residents. Our results indicate that, while this hypothesis is indeed borne out among certain populations within the sample, we find stronger and more widespread support for the opposite phenomenon, suggesting rather that ‘happiness hates company’. These novel findings can inform policy interventions aiming to enhance well-being and point to promising avenues for further work. 

The Decline in Long-Term Earnings Mobility in the U.S.: Evidence from Survey-Linked Administrative Data
Michael Carr & Emily Wiemers
Labour Economics, forthcoming

The growth in cross-sectional inequality has sparked concern about its consequences for long-run economic outcomes. We use survey-linked administrative data to estimate trends in long-term earnings mobility in the U.S. since 1980 focusing on differential trends by gender, education, and race. We find that long-term earnings mobility has declined since the 1980s. Declines in upward mobility have occurred for both men and women, reversing a trend prior to 1980 of increasing long-run mobility for women. The largest declines in mobility are for women and college-educated workers, which is driven both by increases in the rank of earnings early in prime earning years and growing persistence in ranks across the earnings distribution.

Industries, Mega Firms, and Increasing Inequality
John Haltiwanger, Henry Hyatt & James Spletzer
NBER Working Paper, April 2022

Most of the rise in overall earnings inequality is accounted for by rising between-industry dispersion from about ten percent of 4-digit NAICS industries. These thirty industries are in the tails of the earnings distribution, and are clustered especially in high-paying high-tech and low-paying retail sectors. The remaining ninety percent of industries contribute little to between-industry earnings inequality. The rise of employment in mega firms is concentrated in the thirty industries that dominate rising earnings inequality. Among these industries, earnings differentials for the mega firms relative to small firms decline in the low-paying industries but increase in the high-paying industries. We also find that increased sorting and segregation of workers across firms mainly occurs between industries rather than within industries. 

Values and Inequality: Prosocial Jobs and the College Wage Premium
Nathan Wilmers & Letian Zhang
American Sociological Review, forthcoming

Employers often recruit workers by invoking corporate social responsibility, organizational purpose, or other claims to a prosocial mission. In an era of substantial labor market inequality, commentators typically dismiss these claims as hypocritical: prosocial employers often turn out to be no more generous with low-wage workers than are other employers. In this article, we argue that prosocial commitments in fact inadvertently reduce earnings inequality, but through a different channel than generosity. Building on research on job values, we hypothesize that college graduates are more willing than nongraduates to sacrifice pay for prosocial impact. When employers appeal to prosocial values, they can thus disproportionately reduce pay for higher-educated workers. We test this theory with data on online U.S. job postings. We find that prosocial jobs requiring a college degree post lower pay than do standard postings with exactly the same job requirements; prosocial jobs that do not require a college degree, however, pay no differently from other low-education jobs. This gap reduces the aggregate college wage premium by around 5 percent. We present a variety of supplementary evidence using labor market data, worker survey responses, and a vignette experiment with hiring managers. The findings reveal an unintended consequence of employers’ embrace of prosocial values: it offsets macro-level inequality. 

Life History Strategies, Prestige, and Dominance: An Evolutionary Developmental View of Social Hierarchy
Jon Maner & Connor Hasty
Personality and Social Psychology Bulletin, forthcoming

Although evidence documents the use of prestige and dominance for navigating group hierarchies, little is known about factors that explain people’s orientation toward prestige versus dominance. The current research applied a life history perspective to assess the role life history strategies play in prestige and dominance. Four studies document associations between adopting a slow life history strategy and having an orientation toward prestige. We also saw some (less consistent) evidence that people’s orientation toward prestige is rooted in exposure to predictable childhood environments, a known antecedent of slow life history strategies. Although we observed some evidence that exposure to unpredictable childhood environments was associated with dominance, there was little direct evidence that this relationship was explained by a fast life history strategy. Findings suggest that an orientation toward prestige is likely to be observed in people with a slow life history, who adopt a long-term time horizon for planning and decision-making.


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