Evaluating the Unequal Economy: Poverty Risk, Economic Indicators, and the Perception Gap

AuthorTimothy Hellwig,Dani M Marinova
DOIhttp://doi.org/10.1177/10659129221075579
Published date01 March 2023
Date01 March 2023
Subject MatterArticles
Article
Political Research Quarterly
2023, Vol. 76(1) 253266
© The Author(s) 2022
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/10659129221075579
journals.sagepub.com/home/prq
Evaluating the Unequal Economy: Poverty
Risk, Economic Indicators, and the
Perception Gap
Timothy Hellwig
1
and Dani M Marinova
2
Abstract
How do citizens form evaluations of the economy? Def‌ining features of advanced capitalism like income inequality and
labor market dualization present a challenge for assessing the health of the economy based on a small set of mac-
roeconomic indicators. This is particularly true for those whose proximity to poverty and precarious labor market
position is not always ref‌lected in the off‌icial unemployment rate. For those individuals, socio-economic segrega tion and
the geographic concentration of poverty mean that information on poverty is more accessible and more salient than
information on macroeconomic indicators which needs to be explicitly sought out. Poverty risk thus shapes how
individuals evaluate the economy: at-risk individuals are less likely to rely on conventional indicators of growth and
unemployment and more likely to allocate attention to the poverty rate. Analyses of public opinion data from 27
countries provide support for this argument. We further show that those at risk of poverty know less about economic
performance by standard economic indicators but offer more accurate estimates of nat ional poverty rates. These novel
f‌indings underline the need to depart from familiar indicators and address how unequal economies structure preferences
and policy responses.
Keywords
poverty risk, economic perceptions, inequality, political knowledge, occupational unemployment
A consequence of the widening gaps between rich and
poor is that the aggregate macroeconomic indicators used
to summarize the performance of the national economy
growth, jobs, and pricesgloss over substantial varia-
tions in how the economy performs for a great number of
citizens.
1
Evidence to this point is not hard to f‌ind. In the
United States, while overall unemployment declined
between 2011 and 2019, minorities have fared consid-
erably worse in the aftermath of the Great Recession
(Strolovitch 2013). In Germany, historically low unem-
ployment in 2015 coincided with the highest levels of
poverty since reunif‌ication, and income inequality grew
more steeply than in any other European country
(Deutsche Welle 2015). In Britain in 2016, two-thirds of
the poor lived in households where there was someone in
work (Armstrong 2018). And most recently, analysts
foretell that the economic fallout from the coronavirus
pandemic will not be felt evenly but will disproportion-
ately harm women and racial minorities (Frye 2020).
Benchmarking economic health to a handful of standard
indicators means fails to capture the well-being of many
citizens. The unequal economy requires us to revisit the
bases of a central factor in democratic politics in devel-
oped democracies: evaluations of the economy. Existing
models of opinion formation emphasize the inf‌luence of
economic indicators, individual capacity to process in-
formation, and political dispositions. These accounts,
however, overlook the role of economic diversity within
advanced capitalism. As political economy research has
shown, dualized and gendered labor markets, transfor-
mation to knowledge and gig economies, and changing
household compositions have widened gaps between the
haves and have-nots. How do people make sense of
economic conditions in unequal societies?
1
Department of Political Science, Indiana University, Bloomington, IN,
USA
2
Department of Political Science and Public Law, Universitat Aut`
onoma
de Barcelona, Barcelona, Catalunya, Spain
Corresponding Author:
Timothy Hellwig, Department of Political Science, Indiana University,
1100 E. Seventh St, Bloomington, IN, USA.
Email: thellwig@indiana.edu

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