Economic inequality increases political and social distrust
Rising income inequality correlates with declining trust in democratic institutions, including parliament, politicians, political parties, legal systems and media, researchers have found. To explore this further, they have created a huge new international database to examine the impact of decades of inequality on social, economic and political life. “Interestingly, the negative effect of inequality on political trust is pretty immediate,” says project coordinator Markus Gangl(opens in new window), professor of Sociology at Goethe University, Frankfurt-am-Main, Germany. “You’d think the effects would be more slow-moving, more cumulative. But we find negative political effects much faster than we previously thought.” Inequality is not the sole driver of political sentiment, he cautions, but even in cases where the project had only four years of data, changing inequality was found to be associated with changes in political trust. “That’s just one election cycle, so even over short historical periods, inequality matters,” Gangl notes.
Comprehensive longitudinal database
Creating a comprehensive database of approximately five million records from existing international surveys covering over 30 countries took up almost half the POLAR(opens in new window) project’s five-year timeframe. This enabled unprecedented longitudinal analysis across multiple themes. “We did not do original surveys but tried to bring together and harmonise existing representative household surveys from different countries from various large-scale international survey projects. We generated a new database to get this broad historical and geographical coverage from the 1980s to the pandemic,” Gangl explains. In wealthy countries, including outside the European Union, economic inequality has grown significantly over the last 30 to 50 years, he adds. New statistical models were devised to look into critical aspects of liberal democracies and get a sense of how rising inequality has been causally transforming societies, Gangl remarks.
Market earnings more important than household incomes
The research found differences in earnings that an individual can achieve in the marketplace are a more important political indicator than household incomes after taxes, more commonly used by governments. “Inequality of earnings is key, not inequality of final incomes – that’s where the political impacts are coming from,” according to Gangl. This has important implications: “If it’s earnings that’s decisive, it means that democratic states can’t get trust by more [income] redistribution. This is a tough result, and one that would surprise many politicians.” The project also revealed that as inequality rises, citizens increasingly perceive societal conflict, particularly economic conflict between rich and poor. This has ramifications for social cohesion, though professional classes are more insulated from such tensions. Greater inequality also reduces citizens’ belief in a meritocracy.
Education, mobility and meritocracy
The research confirms the ‘Great Gatsby curve’ – the relationship between inequality and reduced social mobility. “As inequality is rising, economic or financial returns to education rise as well. Well-off parents and their children perceive this faster and also have the financial means to sustain the educational careers of their offspring,” Gangl says. Some of these effects were confirmed in the EU-funded CORRODE project on social stratification and mobility in economic downturns(opens in new window). “Political impacts can come very, very fast but social consequences can sometimes be very slow,” Gangl explains. For example, social mobility and the link between parents’ and children’s economic positions tighten as inequality rises, but this may not be apparent for 20-25 years when the young reach educational and occupational maturity.
Social effects of rising inequality
An unexpected finding, not previously proven empirically, is that with rising inequality individuals increasingly marry others with similar social backgrounds. “We have clear evidence and causal evidence from changes over time, that when inequality is rising within countries, partnership and marriage markets become more closed socially,” notes Gangl. The POLAR project was funded by the European Research Council(opens in new window).
