Social Mechanisms | The Economics of Childhood Episode 5

In this fifth episode of #EconomicsOfChildhood, Professor Durlauf defines his preferred theory when thinking about mobility, The Membership Theory of Inequality.

The Membership Theory of Inequality is the idea that an individuals’ beliefs, preferences, and opportunities are conditioned by their membership to different social identities (ethnicity, gender, religion, etc.). Then, over time, memberships evolve in response to interactions with one another. Finally, what results is persistent inequality and poverty for individuals in some membership groups and not in others. In other words, economic segregation is the key determinant to persistent inequality, and economic inequality generates further segregation.

Overall, the three key takeaways from Durlauf’s Membership Theory of Inequality are:
1) Social outcomes are determined by beliefs, preferences & opportunities
2) These factors provide the conditions of economic segregation
3) The interaction between one and two

Learn more at http://economicsofchildhood.org/