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Polarization and its discontents: does rising economic inequality undermine the foundations of liberal societies?

Project description

The effect of economic inequality on societal openness

Economic inequality has long been thought to diminish societal openness. Empirical evidence to support the argument mostly comes from studies that compare societies with different levels of inequality at the same point in time. The few available studies that track changes in inequality over time and then relate these to changes in societal fundamentals have regularly failed to confirm the argument, however. To reexamine the question, the EU-funded POLAR project aims to create four new multilevel databases that combine microdata from over 30 countries and offer observation windows spanning as far back as the 1970s to gain leverage for a longitudinal empirical analysis. These newly constructed databases will be used for a detailed decomposition of inequality trends and for an analysis of the role of economic inequality for social mobility, support for democracy, and social cohesion in Western societies.

Objective

The project will examine the relationship between economic inequality and societal openness, one of the foundational elements of liberal society. Specifically, the project will provide new empirical evidence on the purportedly negative relationship between inequality and social mobility, support for democracy, and social cohesion in the West. The challenge addressed by the project is foremost empirical: for each dimension of openness, there are straightforward theoretical arguments to link rising inequality with declining openness. In each case, there is widely-known evidence to support a negative relationship in bivariate cross-sectional cross-country data. In each case, however, the best available research has regularly failed to confirm the negative relationships in longitudinal designs that sought to identify the causal impact from within-country changes in inequality. To possibly reconcile the discrepancies, the project will create four new multilevel databases that combine survey microdata across more than 30 countries and over observation windows possibly extending back to the 1970s to gain leverage for an encompassing and stringently longitudinal empirical analysis. The newly constructed databases will be used for a detailed decomposition of inequality trends, a disaggregated description of trends in social mobility, social cohesion and support for democratic governance, and for a differentiated causal analysis of the role of economic inequality for societal openness in the West. The latter rests on suitable multilevel regression specifications that distinguish between mechanical, power- and composition-dependent mechanisms and that involve temporal lags, effect thresholds, systematic treatment effect heterogeneity, and appropriate controls for concomitant trends in order to provide valid effect estimates, but also to contextualize effect occurrence and to possibly identify societal and institutional sources of resilience.

Coordinator

JOHANN WOLFGANG GOETHE-UNIVERSITAET FRANKFURT AM MAIN
Net EU contribution
€ 2 494 665,00
Address
Theodor w adorno platz 1
60323 Frankfurt am main
Germany

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Region
Hessen Darmstadt Frankfurt am Main, Kreisfreie Stadt
Activity type
Higher or Secondary Education Establishments
Links
Other funding
€ 0,00

Beneficiaries (1)