Inequality and identity salience

Abstract This paper provides a simple model of identity salience that is applied to the phenomenon recent rise in right-wing populism Western world. Trade and capital flows, skill-biased technological change, migration have led declining employment wages these economies parallel economic cultural populism, tapping into nativist sentiments. We argue when long-term income stagnation for most population decline some go together with high rates growth at very top, one has zero-sum economics naturally raises possibility using various kinds social identities claim bigger share fixed sized pie. show ethnically or racially polarized societies this leads enable majority ethnic groups vote policies exclude minority so they get greater dwindling surplus. In contrast, more homogeneous societies, would instead lead demand pro-redistribution involve provision public goods.