Giving Up on the Joneses? The Relationship between Income Inequality and Status-seeking

Abstract

The objective of this article is to study status-seeking, defined as pursuit for elevated social status, and how it relates to income inequality. Building on sociological, psychological, and economic literature, we formulate two opposing hypotheses suggesting a positive and a negative relationship between income inequality and status-seeking. To test these hypotheses, we use repeated crosssectional micro-data from the European Social Survey, which was collected biannually from 2002 to 2014, and use it in combination with income inequality data from Eurostat. With this data we complement existing studies by focusing on both between-and within-country overtime variability in income inequality and status-seeking. We find evidence of a negative relationship between income inequality and status-seeking. This supports the hypothesis that with higher levels of economic inequality people have less incentives and less motivation to strive for heightened social status.

Who aspires to have more? The impacts of social class and economic inequality on people’s desire for wealth and status

“…One might argue that because achieving individual mobility in unequal societies requires more effort, this may be a motivating factor for members of low-status groups to seek more. However, it is also possible that the increasing difficulty of catching up with the "haves" will impede the motivations of the "have-nots" to strive for more (Paskov et al, 2016). In line with SIT, we argue that whether inequality motivates or demotivates is likely to depend on whether or not people perceive inequality to be secure in terms of the stability of the intergroup context and legitimacy of wealth differences between groups (Scheepers, 2017;Tajfel & Turner, 1979;Turner & Brown, 1978).…”

“…However, empirical evidence for the prediction that inequality enhances status competition by enhancing status seeking is mixed. For example, results from previous research exploring the association between inequality and status seeking were not consistent, with some analysis showing that inequality increased status seeking (Paskov, Gërxhani, & van de Werfhorst, 2013) and others showing that inequality decreased status seeking (Paskov et al, 2016).…”

“…In any case, except for the work by Paskov et al (2013Paskov et al ( , 2016, there is little empirical work directly testing the relationship between inequality and people's desire for wealth and status. It is important to expand this evidence base because there are limits to the aforementioned perspectives.…”

“…The reasoning underlying this prediction is that greater inequality expands the distance between people from different socio-economic backgrounds, making it more difficult (or even impossible) for people to move up from one socio-economic rank to the next rank. Subsequently, people might give up hope in upward mobility, and then abandon any efforts to seek more wealth and status (Paskov, Gërxhani, & van de Werfhorst, 2016). In a similar vein, greater inequality limits the tendency for people to engage in upward social comparisons because those higher in the wealth hierarchy are no longer relevant comparison targets (Festinger, 1954;Paskov et al, 2016).…”

“…Subsequently, people might give up hope in upward mobility, and then abandon any efforts to seek more wealth and status (Paskov, Gërxhani, & van de Werfhorst, 2016). In a similar vein, greater inequality limits the tendency for people to engage in upward social comparisons because those higher in the wealth hierarchy are no longer relevant comparison targets (Festinger, 1954;Paskov et al, 2016). As a result, in an unequal society, it should be more difficult for people to "keep up with the Joneses" and the realization that they cannot keep up should lead to disengagement and even abandonment of the goal to climb the ladder by pursuing more wealth and status.…”