Misperceiving inequality: the social science of trends, causes, and consequences of economic inequality

Abstract In scholarly outlets and adjacent venues, including policy briefs and reports by influential non-government organizations, it is often claimed that income and wealth inequality have risen sharply and continuously over the past decades. This rise is frequently attributed to macro-social processes such as globalization and market liberalization (often discussed as neoliberalism). It is also commonly argued that inequality, especially when high and rising, contributes to social harms such as democratic erosion, lower trust, ill health, crime, and reduced wellbeing. This paper challenges the idea that there is settled consensus and argues that several key claims are overstated, period-specific, or insufficiently supported. Using standard within-country inequality measures, cross-country trend evidence, and a broad review of the empirical literature, I assess three propositions: that inequality has kept rising in recent decades; that neoliberalism and globalization are principal causes of this rise; and that inequality is a strong independent driver of major social outcomes. I show that many trend claims depend heavily on periodization and measurement choices, that causal claims about determinants remain mixed, and that evidence on social consequences is often weaker and more heterogeneous than popular debate suggests.