Between-group Inequality Research Articles

Absolute versus Relative Poverty and Wealth: Cooperation in the Presence of Between-Group Inequality

Abstract While inequality in resource endowments has been shown to affect cooperation levels in groups, much of this evidence comes from studies of within-group inequality. In an online public goods experiment, we instead examine the effects of payoff-irrelevant inequality in resources between groups on cooperation within equal groups, i.e. the effect of mere exposure to inequality. When all groups are poor or rich, their contribution behaviour is very similar. Relative inequality, when poor and rich groups coexist, leads to lower contributions in rich groups. We find suggestive evidence that this may be related to stereotypes about the rich contributing less than the poor.

Evolution and driving factors of inequality in CO2 emissions from agricultural energy consumption in China

The inequality in CO2 emissions from agricultural energy consumption is a major challenge for coordinating low-carbon agricultural development across regions in China. However, the evolutionary characteristics and driving factors of inequality in China’s agricultural energy-related CO2 emissions are poorly understood. In response, the Kaya–Theil model was adopted to examine the three potential factors influencing CO2 emission inequality in China’s agricultural energy consumption. The results revealed that, from 1997 to 2021, agricultural energy-related CO2 emissions per capita showed a significant upward trend, with prominent polarization and right-tailing phenomena. Overall, the inequality was on a downward trend, with the Theil index falling from 0.4109 in 1997 to 0.1957 in 2021. Meanwhile, the decomposition of the national inequality revealed that the within-group inequality declined from 0.3991 to 0.1634, which was greater than between-group inequality, based on zoning the 28 provinces into three grain production functional areas. As for the three kaya factors, the energy intensity contributed the most to the overall inequality, followed by the agricultural economic development and CO2 emission intensity. Based on these results, this study provided some potential strategies to reduce agricultural-related CO2 emissions.

Ethnic, Linguistic, and Religious Heterogeneity and Preferences for Public Goods and Redistribution in Latin America

One of the most prominent political-economic arguments is that heterogeneity undermines support for public goods and redistribution. Past research, however, has been mostly cross-sectional, used weak measures of heterogeneity, under-studied Latin America, and did not examine the multiple bases of heterogeneity. We assess negative (fractionalization and between-group inequality [BGI]) and positive (compensation) hypotheses with time-varying measures of ethnic, linguistic, and religious heterogeneity. We analyze four different preferences using up to six survey waves with over 200,000 Americas Barometer respondents across 24 Latin American and Caribbean countries. We estimate both fixed-effects models focusing on within-country variation and multilevel models focusing on between-country variation. Regardless of estimation technique, the prevailing pattern is statistical insignificance for both heterogeneity and BGI coefficients. The results largely contradict the fractionalization hypothesis, as only four of the 108 relevant heterogeneity coefficients are significantly negative. There is slightly more support for the BGI hypothesis, and especially ethnic BGI. Still, most BGI coefficients are insignificant and linguistic BGI is significantly positive in most models. The compensation hypothesis receives more support, as almost half of the heterogeneity coefficients are significantly positive. We conclude by cautioning against universal claims that heterogeneity undermines support for public goods and redistribution.

The long-term consequences of power-sharing for ethnic salience

Does power-sharing reduce or increase ethnic salience? Drawing on social psychology, I identify two countervailing mechanisms that help reconcile previously opposed findings. First, prolonged power-sharing practices attenuate between-group inequalities. Thereby, they gradually reduce the usefulness of ethnic identities as ‘rules of thumb’ and decrease their salience. Second, extended periods during which individuals live under ethnically differentiated power-sharing institutions render ethnic identities more accessible and thereby increase their salience. To test these expectations, I rely on the most extensive collection of mass surveys used in the empirical literature on ethnic salience so far, encompassing more than 900,000 respondents from a total of 132 countries. I show that power-sharing affects individuals’ self-identification and vote intentions in accordance with my arguments. As my findings are based on specifications that incorporate fixed effects at the group- and group-year levels, they are unlikely to be endogenous to the provision of power-sharing to groups whose identities are most salient in the first place. My findings have important implications for efforts to institutionalize peace in divided societies and for the literature on ethnic conflict.

A high-frequency digital economy index: text analysis and factor analysis based on big data

ABSTRACT We propose a high-frequency digital economy index by combining official white papers and big data. It aims to resolve the discrepancy between the new economic reality and old economic indicators used by decision-makers and policymakers. We have demonstrated a significant effect due to keyword rotations on the indices. Further analysis of the Dagum-Gini coefficient shows that spatial heterogeneity and temporal variation of the digital economy indices can be mainly attributed to between-group inequality.

Inference on Conditional Quantile Processes in Partially Linear Models with Applications to the Impact of Unemployment Benefits

Abstract We propose methods to estimate and make inferences on conditional quantile processes for models with both nonparametric and (locally or globally) linear components. We derive their asymptotic properties, optimal bandwidths, and uniform confidence bands over quantiles allowing for robust bias correction. Our framework covers the sharp regression discontinuity design, which is used to study the effects of unemployment insurance benefits extensions, focusing on heterogeneity over quantiles and covariates. We show economically strong effects in the tails of the outcome distribution. They reduce the within-group inequality, but can be viewed as enhancing between-group inequality, although they help to bridge the gender gap.

Visible Consumption, Income Inequality and Social Comparisons. Evidence from Four Latin American Countries

Increased conspicuous consumption motivated by status-seeking behavior can undermine the gains in well-being derived from economic growth. Using expenditure surveys from Argentina, Brazil, Mexico and Uruguay, we assess visible consumption motivated by status seeking behaviour, analyzing different hypotheses about the role of externalities driven by social comparisons and income inequality. Specifically, we provide evidence for the relevance of different reference groups, assessing comparisons with richer (Veblen effects), poorer and similar profile groups (Duesenberry effects). We show that individuals are affected by multiple reference groups. Regarding between-group inequality, we find that individuals mainly seek to differentiate themselves from poorer groups, rather than imitating richer ones. In all cases, average reference group income of similar profile individuals is negatively related to visible consumption. Meanwhile, within-reference group responses are relevant in Argentina, Brazil and Mexico: increased visible goods consumption is associated with larger relative income gaps. In Argentina and Brazil, the sensitivity of visible goods expenditures to income is higher among households located above the reference threshold, which is consistent, again, with more affluent households trying to signal status by differentiating themselves from the most deprived group members. Meanwhile, in the case of Mexico, there is a symmetric response.

INCOME INEQUALITY OF RURAL HOUSEHOLDS IN POLAND – ANALYSIS BY SOURCE OF INCOME

Rural households live on income much lower than the national average and experience income inequality much higher than the general population. This excess inequality is primarily due to the internal heterogeneity caused by the different nature of household income sources. The purpose of the study was then to assess the level of rural household income inequality and to decompose the inequality index by the main sources of income. The chosen inequality index was Theil-T. The research drew on unidentifiable microdata from the Household Budget Survey conducted by the CSO in 2019-2021.The study found that rural household inequality was slightly higher than that of all Polish households over the analyzed period. Among the various income-source groups, the highest inequality affected farmer households. This group also contributed most to the overall level of inequality in rural areas (44% in 2019 and over 46% in 2021). The pandemic saw an increase in inequality for all identified groups of rural households (the largest – for farmer households) and a decrease in between-group inequality.

Sustainable Development Goal 10: Reducing Inequality – Evidence from India and its States

The United Nations Development Programme (UNDP) embraced seventeen Sustainable Development Goals (SDGs) in 2015, recognising the global imperative to address societal challenges. Among these goals, SDG 10 focuses on reducing inequalities within and among countries. Instead of examining inequalities within and among countries, our study assesses within-group inequality (within rural and urban) and between-group inequality (between rural and urban) of all India and its fifteen major states from 1983 to 2011–12. Our findings indicate that within-group inequality contributes most to overall or combined inequality. To effectively achieve the sustainable development goal in India, it is crucial to prioritise efforts towards reducing within-group inequality (within rural and urban). Additionally, it is essential to monitor the between-group inequality (between rural and urban) so that it does not increase excessively. Also, we have suggested some policies to achieve SDG 10 while fostering a more inclusive society.

Experience of discrimination in egalitarian societies: the Sámi and majority populations in Sweden and Norway

ABSTRACT The Sámi people stand out as the only Indigenous minority in an egalitarian European context, namely the Nordic Countries. Therefore, inequalities that they may face are worth closer inspection. Drawing on the distinction between inequalities among individuals (vertical) and between groups (horizontal), we investigate how different types of inequalities affect the Sámi today. We formulate a series of hypotheses on how social, economic, cultural, and political inequalities are linked with discrimination experience, and test these with original data from a population survey conducted in northern Norway and northern Sweden simultaneously in 2021. The findings show that Sámi ethnic background increases the probability of experiencing discrimination. While individual-level economic inequality is also pertinent, this does not directly materialise as between-group inequality. Instead, minority language use is a strong predictor of discrimination experience, revealing the socio-cultural nature of ethnic inequalities. Cross-country differences are only reflected in the effect of minority language use.

Measuring inequality of household carbon footprints between income groups and across consumption categories in China

To achieve carbon neutrality, most countries focus on reducing carbon footprint and its inequality based on not only production, but also consumption. We applied multi-source data and methods to measure inequality of consumption-based household carbon footprints (HCFs) between income groups and across consumption categories. Results showed that, per capita household carbon footprints (PHCFs) increased continuously in 2011–2017, from 1.75 t CO2 to 2.47 t CO2. The increment was larger and larger owing to the rapidly growing household consumption expenditure. Average PHCF of high-income households was 5.33 times greater than that of low-income households in 2017. The high-income households should be more responsible for reducing HCFs and implementing the shift to the low-carbon lifestyle. Inequality was significant with a Gini coefficient of 0.458 for total PHCFs. The contribution rate of between-group inequality to overall inequality was increasing, from 42.49% in 2011 to 60.39% in 2017. There was the polarization characteristic in the inequality of HCFs between income groups. Gini coefficients of PHCFs for some categories were much greater than that of total PHCFs. It is necessary to focus on these categories such as rent, car purchase, furniture and durable goods to reduce HCF inequality. This study revealed the key income groups and consumption categories contributing most to HCF and its inequality, which could provide the references for carrying on the studies and actions of reducing them in the developing countries.

Migrant Status and the Wellbeing Gap: The Case of an Ethnically Diverse, High-Conflict Area in Indonesia

Communities with high levels of in-migration can experience substantial social, cultural, and economic change due to the upheaval in social dynamics and changes to the economy. Such upheaval can result in between-group inequalities amongst the native and migrant populations, with migrants tending to have lower levels of wellbeing compared to those who were born in the area. Through utilising a culturally adapted wellbeing measurement tool, the Indonesian Wellbeing Scale, this study examines the native-immigrant wellbeing gap in Papua, Indonesia. Papua has historically experienced high levels of conflict, and is highly ethnically diverse, making it a unique context to examine the native-immigrant wellbeing gap. Drawing on data collected in 2020, the results indicate that the immigrant population has significantly higher levels of wellbeing when controlling for a number of socio-demographic characteristics. This finding is driven by all wellbeing dimensions within the Indonesian Wellbeing Scale: spirituality, social relations, material needs, and self-acceptance. Possible explanations for this include the happy migrant hypothesis, levels of wellbeing pre-migration, and impacts of the migration process. These findings have important implications for migration within both Indonesia, and in similar contexts throughout the world, highlighting that care must be taken when implementing migration policies to ensure that receiving communities are not negatively affected. Furthermore, the study emphasises the value in using a multidimensional, culturally adapted wellbeing measurement tool that was developed in consultation with individuals in the community to ensure we are more closely measuring what matters to people.

Gender Pension Gap in EU Countries: A Between-Group Inequality Approach

Pension entitlements are influenced by individual career paths and labor market conditions, which often result in gender-based disparities. Women face several challenges during their working lives, such as late entry into the labor market, the gender pay gap, discontinuous working careers, and early retirement due to family caregiving, which lead to lower pension incomes. This paper investigates the gender pension gap in nine European Union countries from 2004 to 2020. Our study adopts a non-parametric estimation strategy that utilizes additively decomposable inequality measures to provide a more informative perspective on gender inequality. We aim to demonstrate that this approach surpasses the standard gender gap in pension index in capturing between-gender inequality in societies. Employing data from the SHARE database, we find that gender inequality in the studied countries is decreasing on average, with a convergence trend observed from 2011 onwards. This study contributes to a more comprehensive understanding of the gender pension gap phenomenon, which is crucial for developing effective policy responses in a welfare perspective.

Absolute vs. relative poverty and wealth: Cooperation in the presence of between-group inequality

While inequality in resource endowments has been shown to affect cooperation levels in groups, much of this evidence comes from studies of within-group inequality. In an online public goods experiment, we instead examine the effects of payoff-irrelevant inequality in resources between groups on cooperation within equal groups. When all groups are poor or rich, their contribution behaviour is very similar. Relative inequality, when poor and rich groups coexist, leads to lower contributions in rich groups. Our results suggest that this is related to a combination of within- and between-group inequality aversion and to stereotypes about the rich contributing less than the poor.

Comparing latent inequality with ordinal data

Summary We propose new ways to compare two latent distributions when only ordinal data are available, and without imposing parametric assumptions on the underlying continuous distributions. First, we contribute identification results. We show how certain ordinal conditions provide evidence of between-group inequality, quantified by particular quantiles being higher in one latent distribution than in the other. We also show how other ordinal conditions provide evidence of higher within-group inequality in one distribution than in the other, quantified by particular interquantile ranges being wider in one latent distribution than in the other. Second, we propose an ‘inner’ confidence set for the quantiles that are higher for the first latent distribution. We also describe frequentist and Bayesian inference on features of the ordinal distributions relevant to our identification results. Our contributions are illustrated by empirical examples with mental health and general health.

Inequality, elections, and communal riots in India

How does inequality within and between ethno-religious groups influence the likelihood and frequency of communal riots? Using evidence from India, this article finds that low within-group and high between-group inequality dampens the likelihood and frequency of communal riots. Theoretically, the article suggests that the instrumental logic, which posits that ethnonationalist politicians use violence to stoke ethnic cleavages and mobilize support, best accounts for this finding. We argue that to be politically competitive, ethnonationalist politicians need their supporters to identify foremost with their ethnic identity. When inequality within groups is high and/or inequality between groups is low, citizens are less likely to focus on ethnicity as their primary identity. In such contexts, politicians may use communal riots to improve their electoral prospects by reinforcing the salience of ethnicity. Empirically, the article relies on a time-series cross-district analysis of inequality and Hindu–Muslim riots in India to test the instrumental argument against theoretical alternatives. To illustrate the causal logic, the article also uses the analysis of a communal riot that occurred in Muzaffarnagar, Uttar Pradesh. Analyzing three aspects of the riot – background conditions, timing, targets of propaganda – we evaluate the different predictions of the instrumental argument. The article concludes with the suggestion that communal riots are distinct from cases of mass violence – such as civil wars, genocide, and ethnic cleansing – and could be conceptualized, along with other types of small-scale political violence, as a separate class of events with their own internal logic.

Perpetuating inequality through participation in adult learning and education in Russia

ABSTRACT We apply cumulative advantage (CA) theory to understand the social hierarchies behind the accumulation of skills and rewards through Adult Learning and Education (ALE) – formal, informal, and non-formal. Using representative data from the Russian Longitudinal Monitoring Survey (RLMS-HSE), we confirm the assumption of CA theory that advantages are accumulated through ALE, not only within social groups, but also between them. For individuals coming from educationally advantaged families but without higher education, participation in informal non-job-related ALE and formal ALE enhances employment chances. It is therefore a strategy to compensate for the lack of higher education for those coming from educationally advantaged families. For those coming from less educationally advantaged families, higher education moderates the positive effect on wages of non-formal ALE without employer support. Rather than being a way to compensate for between-group inequalities, this type of ALE allows for labour market adaptation for the educationally disadvantaged and has positive effects within the group. We conclude that various types of ALE are institutionalised into different paths of human capital accumulation.

What Explains Caste-based Wage Inequalities and Earning Gaps in the Indian Labour Market? Theil and Oaxaca Decomposition Analysis

Caste-based wage discrimination can counteract the development process. This article uses two distinct estimation methods to examine earning gaps between forward castes also referred to as ‘general category’ workers and traditionally disadvantaged or ‘backward caste’ workers in the Indian labour market. First, we interpret the inequality indicator of the Theil index and decompose Theil to show within and between-group inequalities. Second, a Threefold Oaxaca Decomposition is employed to break earnings differentials into components of endowment, coefficient and interaction. Earning gaps are examined separately in urban and rural divisions. Within-group inequalities are found larger than between groups across variables, with a higher overall inequality for forward castes. Wage differentials are substantially greater for urban areas and favour FC. A high endowment implies pre-market discrimination in human capital investments such as nutrition and education. Policymakers should first invest in basic quality education and simultaneously expand postgraduate diploma opportunities, subsequently increasing participation in the labour force for traditionally disadvantaged in disciplines and occupations where forward castes have long dominated. JEL Codes: J01, J08, J15, J30, J31, J71

Determinants and regional contributions of industrial CO2 emissions inequality: A consumption-based perspective

The assessment of industrial consumption-based carbon dioxide emissions could explain interregional differences in carbon dioxide emissions resulting from economic activity. This study aims to assess per capita industrial consumption-based carbon dioxide emissions inequality across provinces, municipalities, and autonomous regions in China from 2002 to 2017. The status and main determinants of per capita industrial consumption-based carbon dioxide emissions inequality are calculated using environmentally multi-regional input–output models and the Theil index, respectively. Comparisons with accounting results from the production side are then analyzed. The main conclusions are as follows: (1) From 2002 to 2012, both per capita industrial consumption-based carbon dioxide emissions and per capita industrial production-based carbon dioxide emissions in China show an obvious upward trend, and gradually stabilize in 2015 and beyond. (2) Economic trade leads to obvious carbon leakage among Chinese provinces and industrial sectors: the consumption-based carbon dioxide emissions of the downstream sector of the industrial supply chain is less than its production-based carbon dioxide emissions, while the carbon dioxide emissions of upstream industrial sectors is on the contrary. (3) China's per capita industrial production-based carbon dioxide emissions inequality is significantly greater than consumption-based inequality, and this gap is gradually widening. Among them, between-group inequality is the key component, but the contribution of within-group inequality is gradually increasing, which tends to exceed between-group inequality. (4) Among the eight economic groups in China, per capita consumption is the main driving factor of consumption-based carbon dioxide emissions inequality, but the industrial production carbon dioxide emissions intensity is the main contributor to production-based inequality. The above findings would provide certain theoretical support and policy references for policymakers when formulating industrial carbon emissions reduction policies.

Between-group inequality may decline despite a rising skill premium

A vast literature aimed at understanding the nature and causes of wage inequality focuses on the skill premium as a key object of interest. In an environment where both the skill premium and the share of skilled workers are changing, however, the between-skill-group component of inequality may fall even as the skill premium rises – a pattern that is indeed observed in the U.S. and in many local labor markets during the 2010s. Understanding the evolution of the skill premium is therefore not always useful in terms of understanding why broad inequality measures are changing.