Economic inequality has been found to have pernicious effects, reducing mental and physical health, decreasing societal cohesion, and fueling support for nativist parties and illiberal autocratic leaders. We start this review with an outline of what social identity theorizing offers to the study of inequality. We then articulate four hypotheses that can be derived from the social identity approach: the fit hypothesis, the wealth‐categorization hypothesis, the wealth‐stereotype hypothesis, and the sociostructural hypothesis. We review the empirical literature that tests these hypotheses by exploring the effect of economic inequality, measured objectively by metrics such as the Gini coefficient as well as subjectively in terms of perceptions of economic inequality, on wealth categorization (of others and the self), the desire for more wealth and status, intergroup hostility, attitudes towards immigrants, prosocial behavior, stereotyping, the wish for a strong leader, the endorsement of conspiracy theories, and collective action intentions. As we will show, this research suggests that economic inequality may have even more far‐reaching consequences than commonly believed. Indeed, investigating the effects of economic inequality on citizens' sociopolitical behaviors may be increasingly important in today's turbulent political and social landscape.

An emerging body of literature has documented the negative implications high economic inequality can have on children's social and cognitive development. However, little experimental research has directly addressed how wealth discrepancies impact the way children treat others. The current study thus aimed to address the implications of economic inequality on prosocial decision-making in children prior to commencing formal schooling. Using a novel experimental paradigm, we immersed 4-year-old children (N = 58) in a series of games where they played against puppets for rewards. During this process, children were exposed to resource allocations featuring either high inequality or low inequality. We subsequently measured children's donation behaviour, resource division behaviour, and fairness perceptions. As predicted, children were less altruistic when exposed to high inequality compared to low inequality. Contrary to predictions, there was no difference in resource division behaviour or fairness perceptions. This study documents for the first time that exposure to environmental inequality, even if brief and in a controlled experimental setting, can influence young children's prosocial decisionmaking. Statement of contribution What is already known on the subject? Adults tend to be less prosocial towards others after experiencing high economic inequality. Young children understand when outcomes are unequal. Young children also have a rudimentary understanding of what is fair. What does this study adds? A novel experimental design was utilized to immerse children in a safe experimental economy. Pre-schoolers are less altruistic after experiencing high inequality compared to low inequality. Children did not attempt to adjust prior inequalities in their resource division behaviour.

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What are the things that we think matter morally, and how do societal factors influence this? To date, research has explored several individual-level and historical factors that influence the size of our ‘moral circles.' There has, however, been less attention focused on which societal factors play a role. We present the first multi-national exploration of moral expansiveness—that is, the size of people’s moral circles across countries. We found low generalized trust, greater perceptions of a breakdown in the social fabric of society, and greater perceived economic inequality were associated with smaller moral circles. Generalized trust also helped explain the effects of perceived inequality on lower levels of moral inclusiveness. Other inequality indicators (i.e., Gini coefficients) were, however, unrelated to moral expansiveness. These findings suggest that societal factors, especially those associated with generalized trust, may influence the size of our moral circles.

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Amid a global pandemic and the looming climate crisis, there is an increasing need to understand how to promote largescale, coordinated action between different groups. Yet certain factors – such as inequality between groups – can hinder cooperation. We aimed to establish how to orient groups towards a superordinate goal when they have unequal resources. Participants were divided into two ‘countries’ and asked to assemble Lego into food (by building pieces in a certain order) to prevent starvation amongst ‘the people’. One ‘country’ had few pieces of Lego whereas the other had an abundance, and the only way to maximise food creation was for the groups to work together. We assessed the efficacy of three diverse interventions on superordinate behavior and attitudes: compassion meditation training (Study 1), lower inequality (Study 2), and the introduction of a pro-sharing group norm by a confederate (Study 3). Compassion meditation training and altering the degree of inequality between groups did not have a clear effect on collaborative action. Instead, only the introduction of a pro-sharing group norm resulted in enhanced sharing behavior, made participants feel more cooperative and reduced fears of being compassionate towards others. Our findings speak to the importance of leadership in promoting coordinated action to address challenges that face the superordinate group.