A Competitiveness-Based Theoretical Framework on the Psychology of Income Inequality

Abstract

Social scientists have begun to extensively study how living in contexts with high income inequality affects psychological outcomes. Herein we overview a conceptual framework that integrates, organizes, and extends these complex (and sometimes contradictory) findings. First, we describe studies showing that income inequality breeds an ethos of competitiveness. Second, we argue that the inequality-competitiveness relation explains why income inequality (a) promotes status-focused behaviors aimed at lifting oneself up and/or bringing others down, (b) harms social relations when they pose an obstacle to one's economic advancement, (c) exerts opposing effects on well-being via avoidance motivation (focusing on the risk of economic failure) and approach motivation (focusing on the prospect of economic success), and (d) represents a threat to those who perceive they do not have sufficient individual/contextual resources to cope with the demands of competition but a challenge to those with sufficient resources. We also discuss limitations and future directions for research.

Keywords: avoidance and approach motivation; economic status; income inequality; perceived and personal competitiveness; threat and challenge appraisal.

Fig. 1.

A competitiveness-based theoretical framework on the psychology of income inequality.

Fig. 2.

Perceived (left) and personal (right) competitiveness at school as a function of national income inequality (Sommet et al., 2023). Note: The outcome variables use 4-point response scales; the country codes (ISO 3166-1 alpha-3 codes) indicate the national averages of the outcome variable; shaded areas represent 95% confidence intervals.

Fig. 3.

Opposing effects of income inequality on well-being via perceived competitiveness and avoidance/approach motivation (Sommet & Elliot, 2023). Note: Subscripts indicate the wave number. Numbers represent standardized estimates, and values of β = .10, β = .175, and β > .25 can be seen as small, medium, and large effects, respectively. Asterisks indicate significant paths (**p < .01, ***p < .001).