Fading hope and the rise in inequality in the United States

Abstract

A substantial literature claims that the strong increase in inequality over the last decade in Western industrial countries such as the United States (US) would lead to increasing tensions between different socio-economic groups which might in turn hamper economic growth. The population’s fading hopes regarding the outlook on the future seem to confirm this. This paper qualifies this interpretation using survey data collected by the Pew Research Center for the People covering 1999–2014. Over the first decade, the decline in hope cannot be traced back to the rising inequality. However, recent data from 2014 suggest that inequality is now a major driver of a lower than ever level of hope. Hence inequality is a recent factor, not the driver of the long-term decline in hope.

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Notes

  1. 1.

    See Angrist and Pischke (2015) chapter 2 for an introduction to regression analysis.

  2. 2.

    It is known that since OLS and Probit are in the same class of models, they deliver similar conclusions if the standard errors in OLS are adjusted. On the suggestion of a referee we nevertheless provide the probit estimates in an Appendix Table 4 for demonstration. All findings are indeed identical.

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Acknowledgements

The authors thank the Editors and two anonymous referees for many valuable comments and suggestions, Caroline Wehner for able research assistance, Victoria Finn for editorial comments and the Pew Research Center for the People & the Press (PEW) for providing the data.

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Correspondence to Klaus F. Zimmermann.

Appendix

Appendix

See Table 4.

Table 4 Probit estimates of hope

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Ritzen, J., Zimmermann, K.F. Fading hope and the rise in inequality in the United States. Eurasian Bus Rev 8, 1–12 (2018). https://doi.org/10.1007/s40821-016-0071-3

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Keywords

  • Confidence
  • Ethnicity
  • Hope
  • Human capital
  • Income inequality

JEL Classification

  • D31
  • J15