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The Resilience and Reinforcement of Group Cohesion in the Face of Economic Inequality

Author

Listed:
  • Jozwik, Jan

    (School of Economics, University of Nottingham Ningbo China)

  • Lane, Tom

    (Newcastle University Business School)

  • Song, Lina

    (Nottingham University Business School)

  • Zhang, Fan

    (Independent researcher)

Abstract

Building on evidence that group cohesion drives economic efficiency, we hypothesise income inequality influences efficiency by altering cohesion, with the direction depending on inequality type. Using a novel experimental design with extensive group interactions and a state-of-the-art group cohesion measure, we confirm stronger cohesion is associated with more efficient interactions. Group cohesion is strengthened by inequality between groups, a mechanism previously overlooked. Furthermore, unexpectedly, inequalities within groups do not hinder cohesion. These results suggest interpersonal relationships display resilience to economic disparities, challenging the prevailing argument that inequality must harm cohesion, and undermining a pathway through which it could reduce efficiency.

Suggested Citation

  • Jozwik, Jan & Lane, Tom & Song, Lina & Zhang, Fan, 2026. "The Resilience and Reinforcement of Group Cohesion in the Face of Economic Inequality," Newcastle Economics Discussion Papers 2026-02, Newcastle University Business School, Economics Subject Group.
    • Handle: RePEc:nwc:wpaper:2026-02
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    JEL classification:

    • C99 - Mathematical and Quantitative Methods - - Design of Experiments - - - Other
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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