Stratification economics: historical origins and theoretical foundations

Stratification economics (SE) investigates how economies are organized around group inequalities, especially by race and gender but also by ethnicity, national origin, religion, sexual orientation, etc. Its historical origins and theoretical foundations have both a structural strand that addresses how and a social behavioural strand. SE’s structural strand goes back to Ricardo and Marx regarding the relationship between growth and distribution, and then draws on recent economic theory of noncompeting groups and dual economy models of labour market segmentation. SE’s structural strand produces an inequality-based understanding of economics’ standard goods taxonomy. The social behavioural strand builds on Du Bois’s psychological wage concept, Veblen’s social ladders theory of emulation, Blumer’s theory of prejudice and stereotyping, and current social identity theory. SE’s social behavioural strand makes it possible to explain how discrimination selectively stigmatizes people’s social identities in order to reinforce existing intergroup inequalities.