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Cognitive Dissonance, Status, and Growth of the Underclass

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  • Robert Oxoby

    (University of Calgary)

Abstract

We present a model of cognitive adaptation to examine the growth and behaviours of the underclass. In the model, individuals experiencing cognitive dissonance between status seeking and social recognition adapt their attitudes regarding what is deemed status worthy. This yields the endogenous formation of an underclass in which non-pecuniary social returns counteract the effect of traditional incentives (i.e. wages) in motivating behaviour. By gaining insight into the process of psychological adaptation of those living in poverty, the paper sheds light on economic policies that mitigate the disenfranchisement and hence the growth of the underclass. Copyright 2004 Royal Economic Society.

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Bibliographic Info

Paper provided by Department of Economics, University of Calgary in its series Working Papers with number 2001-02.

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Date of creation: 05 Dec 2001
Date of revision: 05 Dec 2001
Handle: RePEc:clg:wpaper:2001-02

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