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Fading hope and the rise in inequality in the United States

Jo Ritzen & Klaus F. Zimmermann

A substantial literature claims that the strong increase in inequality over the last decade in Western industrial countries such as the United States (US) would lead to increasing tensions between different socio-economic groups which might in turn hamper economic growth. The population's fading hopes regarding the outlook on the future seem to confirm this. This paper qualifies this interpretation using survey data collected by the Pew Research Center for the People covering 1999-2014. Over the first decade, the decline in hope cannot be traced back to the rising inequality. However, recent data from 2014 suggest that inequality is now a major driver of a lower than ever level of hope. Hence inequality is a recent factor, not the driver of the long-term decline in hope.

JEL Classification: D31, J15

Keywords: Confidence, ethnicity, hope, human capital, income inequality