Rising inequality and the divergence between objective economic circumstances and subjective status perceptions over time

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(This talk is about joint work with Brian Nolan)
The apparent decline in ‘subjective social status’ of the low-educated working class is a prominent explanation for recent political changes, such as the increasing support for populist political parties. The low-educated working class has been adversely affected by rising income inequality over the past decades, but we do not know if the deterioration in their objective economic circumstances also translates into a perception that their subjective standing in the social hierarchy has actually declined over time. Surprisingly, few studies have investigated whether and how subjective status has changed over time. In this paper we examine trends in subjective status in two ‘most likely cases’ – Germany and the US – between 1980 and 2018. We find no evidence for the claim that the subjective status of the low-educated working class has declined in absolute terms since the 1980s, and only limited evidence that their subjective status has declined in relative terms compared to other groups. We put forward several possible explanations for the divergence between the stable subjective status and the deteriorating objective economic circumstances among the low-educated working class over time. Our study implies that while subjective status perceptions are correlated with a range of social and political outcomes, we need to be careful interpreting the meaning of these associations over time.