Different manifestations of inequality are among the most persistent features of the U.S. economy, yet mainstream economics traditionally explains disparities between groups solely as they relate to differences in either so-called human capital or a lack of economic competition. A subfield within the broader economics discipline, called stratification economics, instead studies and explains inequality as a process in which the outcomes of different groups are shaped by social relationships, power dynamics, and public policies.
Stratification economics is an empirically grounded approach to study disparities across the lines of race, ethnicity, gender, class, caste, sexuality, nationality, and other social markers. This framework also incorporates the importance of social hierarchies and structures in shaping economic outcomes.
William “Sandy” Darity, Jr. is one of the founders of stratification economics. He is the director of the Samuel DuBois Cook Center on Social Equity at Duke University and also a member of the Washington Center for Equitable Growth’s Research Advisory Board. Darity puts forth that stratification economists hold certain assumptions about the processes by which economic and social disparities are created and maintained, as well as about the mechanisms through which they can be addressed. Specifically, these assumptions are that:
- Disparities in groups’ abilities to transfer resources across generations are key drivers of inequality.
- Dominant groups have material interests in actively maintaining their privileged positions.
- Effective public policy is essential to push against discrimination and foster more equitable outcomes.
- The acquisition of human capital does not guarantee that members of an underprivileged group will not experience the economic penalties that stem from discrimination.
- Dysfunctional behavior by some individuals is not reflective of a collective characteristic of a broader group.
In this issue brief, we examine each of these insights in turn.