Work

Segregation, poverty stigma, and redistribution in a status signaling model

Year: 2026

Type: article

Abstract: We study a three-type, two-market signaling model of social status in which status competition is segmented: poor and middle individuals interact in a low-status market, while middle and rich individuals interact in a high-status market. Because the middle type competes in both markets, changes that intensify poor–middle competition can relax status pressure at the top. We show that policies or transfers that raise poor incomes can increase rich welfare for a range of parameter values. We also show that narratives that stigmatize poverty can benefit the rich by reshaping beliefs and status incentives, at the expense of the middle class. Finally, segregation shields the rich from direct status competition with the poor and allows them to substitute away from conspicuous spending, so the rich may have incentives to promote segregation. The model yields predictions about elite distancing, support for targeted transfers to the very poor, and incentives to sustain poverty stigma.

Source: Journal of Economic Behavior & Organization

DOI: 10.1016/j.jebo.2026.107553

Authors: Bianca Sanesi, Ennio Bilancini, Leonardo Boncinelli

Institutions: IMT School for Advanced Studies Lucca, University of Florence

Language: English

Topic: Income, Poverty, and Inequality

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDGs: No poverty, Reduced inequalities

Open Access status: hybrid

Estimated APC paid: $3,180