Higher Economic Inequality Intensifies the Financial Hardship of People Living in Poverty by Fraying the Community Buffer

Jon M. Jachimowicz; Barnabas  Szaszi; Marcel  Lukas; David  Smerdon; Jaideep  Prabhu; Elke U. Weber

Article | Nature Human Behaviour | July 2020

Higher Economic Inequality Intensifies the Financial Hardship of People Living in Poverty by Fraying the Community Buffer

by Jon M. Jachimowicz, Barnabas Szaszi, Marcel Lukas, David Smerdon, Jaideep Prabhu and Elke U. Weber

Abstract

The current research investigates whether higher economic inequality disproportionately intensifies the financial hardship of low-income individuals. We propose that higher economic inequality increases financial hardship for low-income individuals by reducing their ability to rely on their community as a buffer against financial difficulties. This may occur, in part, because a frayed community buffer reduces low-income individuals’ propensity to seek informal financial support from others. We provide empirical support across eight studies (sample size N = 1,029,900) from the United States, Australia, and rural Uganda through correlational and experimental data as well as an instrumental variable analysis. On average across our studies, a 1 s.d. increase in economic inequality is associated with an increase of financial hardship among low-income individuals of 0.10 s.d. We discuss the implications of these results for policies aimed to help people living in poverty buffer against the adverse effects higher economic inequality imposes on them.

Keywords: Economic inequalty; Economy; Income; Equality and Inequality; Poverty; Civil Society or Community;

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Jachimowicz, Jon M., Barnabas Szaszi, Marcel Lukas, David Smerdon, Jaideep Prabhu, and Elke U. Weber. "Higher Economic Inequality Intensifies the Financial Hardship of People Living in Poverty by Fraying the Community Buffer." Special Issue on Racism in Action. Nature Human Behaviour 4, no. 7 (July 2020): 702–712.

Thinking of passionate people typically brings to mind their vivacious expressions. Prior research has shown that such outward manifestations of passion are often met with increased admiration and support by others. But not everyone may express their passion so animatedly. Drawing on personality research, we argue that vivacious expressions of passion capture only a narrow set of passion expressions: those characteristic of extraversion. We suggest that passion is also expressed in ways more aligned with introversion. Based on emerging sociological perspectives, we subsequently propose that introverted expressions of passion are rewarded less social worth than extraverted expressions of passion. We provide empirical support across four studies with full-time employees (N=1,060), including a study of subordinate-supervisor pairs. Our theory and results highlight that interpersonal effects of passion depend on how passion is expressed, whereby those who express their passion extravertedly—but not introvertedly—are more likely to reach higher organizational echelons.

Working Paper | HBS Working Paper Series | 2020

The Pursuit of Passion Propagates Privilege

Josephine Tan and Jon M. Jachimowicz

For many graduating college students entering the workforce, “pursue your passion” is not only a frequently repeated graduation mantra but also a commonly embraced ideal. In line with this view, prior academic research finds that passion connotes work-related benefits, including higher job satisfaction and performance. Here, we bring together social psychological, sociological, and organizational perspectives to suggest that the inclination to work in jobs that enable graduating students to pursue their passion differs based on their socioeconomic status (SES): those from lower SES backgrounds view the pursuit of passion as a privilege that excludes them. Across two correlational and experimental studies (N = 510; k = 1,562), we find that students from lower SES backgrounds feel that they are a worse fit for and lack the skills to thrive in jobs that call for passion, i.e., that they perceive the pursuit of passion as a privilege. We next examine whether this belief is accurate from the perspective of recruiters, and—across two additional experimental studies designed to test both overt and covert discrimination (N = 1,005; k = 9,713)—do not find supporting empirical evidence for discrimination against students from lower SES backgrounds in jobs that emphasize the pursuit of passion. These results suggest that the pursuit of passion may serve as an—unintentionally—exclusionary signal to graduating students from lower SES backgrounds, making them less likely to apply, and ultimately less likely to be hired. The pursuit of passion thus reflects a privilege that perpetuates inequalities along socioeconomic lines.

Keywords: passion; careers; socioeconomic status; discrimination; Emotions; Personal Development and Career; Status and Position; Prejudice and Bias;

Citation:

Tan, Josephine, and Jon M. Jachimowicz. "The Pursuit of Passion Propagates Privilege." Harvard Business School Working Paper, No. 20-136, June 2020. View Details

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We conducted a large-scale survey covering 58 countries and over 100,000 respondents between late March and early April 2020 to study beliefs and attitudes towards citizens’ and governments’ responses to the COVID-19 pandemic. Most respondents reacted strongly to the crisis: they report engaging in social distancing and hygiene behaviors and believe that strong policy measures, such as shop closures and curfews, are necessary. They also believe that their government and their country’s citizens are not doing enough and underestimate the degree to which others in their country support strong behavioral and policy responses to the pandemic. The perception of a weak government and public response is associated with higher levels of worries and depression. Using both cross-country panel data and an event-study we additionally show that strong government reactions correct misperceptions and reduce worries and depression. Our findings highlight that policy makers not only need to consider how their decisions affect the spread of COVID-19, but also how such choices influence the mental health of their population. Data and code is available here.

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Higher Economic Inequality Intensifies the Financial Hardship of People Living in Poverty by Fraying the Community Buffer

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