Stratification economics represents an important new approach devoted to explaining
economic inequality in terms of how social groups are separated or stratified
according to relative group status. This paper combines stratification economics
with identity economics to address complications that the phenomenon of intersectionality—
people having multiple social group identities—creates for stratification
economics. It distinguishes two types of social identities recognised by social
psychologists, categorical and relational social identities, and uses this distinction
to explain how individuals’ personal identities, understood as ordered sets of social
identities, can be seen to be both socially and self-constructed. Individuals order
and rank their categorical social identities according to weights they assign to them
in interactive social settings in which their role-based relational social identities
combine different categorical social identities. Research in social psychology in the
stigma identity-threat literature is then reviewed to distinguish two opposed ways in
which individuals respond to others’ stigmatisation of their social groups in interactive
settings. The paper argues that the ways in which individuals respond to stigma
reflect social group power relationships and the scarcity logic of individualist social
ontologies and tend to reinforce social stratification.
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