How we understand and respond to economic disparities? The role of perceptions and ideologies of inequality
By Efraín García Sánchez (Universidade de São Paulo)
Economic inequality is a defining component of Latin American societies. The colonial legacy of Latin American institutions has settled the ground for reinforcing inequalities by ethnicity, gender, and social class over the years. But the maintenance of inequality also requires people’s compliance, that is, that people accept and justify such social disparities. Thus, the psychology underlying economic inequality can provide insights for understanding why and how people uphold unequal systems.
Economic inequality creates a framework that mobilizes social-psychological processes that affect people’s well-being and political attitudes (Jetten & Peters, 2019). Particularly, perceptions and beliefs about economic inequality shape how people understand, experience, and respond to their reality. As such, what people know (i.e., perception) and what people think (i.e., beliefs) about inequality guides people’s responses towards economic disparities, which in turn can be crucial for pushing social changes.
In this blog article, I share some thoughts and empirical evidence regarding how people legitimate economic inequality, focusing on the role of perceptions and ideologies of economic inequality.
Before talking about the psychology of economic inequality, it is worthwhile to have a glance at its objective magnitude. The first thing to highlight is that Latin America is the most unequal region in the world. Public data from the World Income Database tells us that, from the total national income in Latin America, the top 1% captures the 24.6% and the top 10% captures the 54.4%; whereas the poorer half of the population in the region only get access to 10.1% of the resources (see Figure below). From a comparative perspective, the rich control a larger share of all the resources in Latin America, compared to the rich in other regions of the world; and the poor have even fewer resources than the poor in other regions of the world.
Moving towards a psychology of economic inequality
Although the Latin American region suffers from other urgent social problems (e.g., violence, poverty), most of them are exacerbated by the social architecture created by extreme social and economic disparities. Indeed, higher levels of economic inequality are consistently associated with higher crime and homicides rates, more physical and mental health problems, lower interpersonal and political trust (e.g., Wilkinson and Pickett 2010; Buttrick, Heintzelman, and Oishi 2017; Enamorado et al. 2016); and can undermine people’s democratic engagement (Solt, 2008).
Despite knowing the pernicious effects of economic inequality for all of us, why people do not rebel against it? Why people do not demand more equality and support political agendas that look for reducing social disparities? In this regard, literature coming from social and political psychology suggests that people’s responses towards inequality are the byproduct of how people perceive and think of the world, rather than a rational choice to maximize their benefits.
In our research, we argue that there is an interplay between perceptions and beliefs about inequality on people’s justification of economic disparities. That is, the effect of perceptions of inequality on political attitudes is shaped by people’s ideologies. There are three messages that can be taken from our research.
First, people are highly likely to endorse system justifying beliefs, such as meritocracy and equality of opportunities. In one study, we asked 794 people in Colombia to indicate their agreement with several statements that praise meritocracy and naturalize the current status quo (i.e., economic system justification scale) (García-Sánchez et al., 2018). Surprisingly, we found that most of the people supported the economic system since 72.50% of the people scored above the technical middle point of the scale.
Second, we found that economic system beliefs moderated the effect of perception of inequality on people’s legitimation of economic inequality. We asked people to estimate the incomes that a CEO and an unskilled worker in a large Colombian company currently earn and should earn. We computed a measure of perceived and ideal income gap by estimating the ratio between the earnings of those occupations. We found that perceiving larger income gaps were associated with higher acceptance of income gaps, but such association was stronger for people who believe that the economic system is just. We also found that perceiving larger income gaps increased people’s demands for reducing inequalities, but only for people who do not justify the status quo (García-Sánchez et al., 2018).
Third, we extended our previous findings by using survey data from 41 countries across the world and confirmed this interplay between perception and beliefs about inequality on people’s legitimation of economic disparities. As can be seen in the figure below, we found that perceiving larger income gaps were associated with the acceptance of larger income gaps. This means that people take their perception of inequality to adjust the ideal levels of inequality they think should exist. However, this association between what is and what ought to be was stronger for those who believe in meritocracy and that everyone has equal opportunities to get ahead in life (García-Sánchez et al., 2019).
Similarly, we found that perceiving larger income gaps increased people’s support for the government to reduce inequalities. This association, however, was weaker for people who endorsed system justifying ideologies, that is, for people who believe that hard work warrants success and that everyone has equal chances to get ahead in life in their countries (García‐Sánchez et al., 2020).
Psychological insights for tackling economic inequality
In sum, our previous findings suggest that 1) people misperceive inequality, mostly by underestimating it; 2) people highly endorse ideologies that justify inequality, such as meritocracy beliefs; 3) people use their perception of inequality as a reference point to judge the ideal levels of inequality that should exist; and 4) people’s ideologies shape the effect of perception of inequality on the legitimacy of unequal systems.
Taken together, these processes enclose a vicious cycle that perpetuates economic inequality by gaining people’s minds. If people think that economic inequality is not as large as it is, and if they adjust their tolerance toward inequality based on their perceptions; then, people will not know the problem they are dealing with. On the other hand, if people make sense of inequality based on their misperceptions and misleading beliefs that disregard the role of historical and empirical evidence; then people can end up reinforcing a system that hurts themselves and the society as a whole.
But psychological research can also provide some insights regarding how to break such a vicious cycle. Understanding the psychology underlying economic inequality can assist people and policymakers to design interventions that mobilize people to work for more equal societies. Thus, tackling inequality requires improving the knowledge about inequality and correcting beliefs about its causes. As such, it would be necessary to gain more accuracy regarding the magnitude of inequality that people have in their minds; and build clever narratives that help people to understand the world from the perspective of our history and empirical facts, rather than from our own biased thinking.
Considering the worldwide concerns on health, climate, economic issues, it is crucial to put together our knowledge and our imagination: knowledge to understand things and solve problems; imagination to think better societies that inspire us to keep pushing forward. Perhaps the current challenges can bring some opportunities for improvement and getting us closer to a better society.
About the Author
Efraín García-Sánchez is a Posdoctoral researcher at the Núcleo de Estudos da Violência, Universidade de São Paulo, Brazil; and Research Fellow at the Lab of Social Psychology of Inequality, Universidad de Granada, Spain. His research focuses on the psychological processes related to the legitimation of inequality and political attitudes.
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Enamorado, T., López-Calva, L. F., Rodríguez-Castelán, C., & Winkler, H. (2016). Income inequality and violent crime: Evidence from Mexico’s drug war. Journal of Development Economics, 120, 128–143. https://doi.org/10.1016/j.jdeveco.2015.12.004
García-Sánchez, E., Van der Toorn, J., Rodríguez-Bailón, R., & Willis, G. B. (2019). The Vicious Cycle of Economic Inequality: The Role of Ideology in Shaping the Relationship Between “What Is” and “What Ought to Be” in 41 Countries. Social Psychological and Personality Science, 10(8), 991–1001. https://doi.org/10.1177/1948550618811500
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