Social identity and capital income: a social psychological approach to identity economics using UK household data

Robin Bachmann, Ilka H. Gleibs and Liam Delaney

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Social identity research has yet to fully engage with identity economics. This article bridges the two by examining capital market participation and capital income inequality – a critical economic behaviour and a societal issue that remain understudied in social psychology. We integrate psychological concepts and metrics of social identity with large‐scale, representative UK data on household economics, encompassing 60,156 individuals and 130,598 observations from 2010 to 2023. Examining gender, ethnicity, education, occupation, politics, age and family as aspects of individuals' self‐concept, our findings show that between‐ and within‐person variations in these identities, beyond mere group memberships, were uniquely associated with both the presence and amount of capital income. Rather than reinforcing group membership effects, which could suggest adherence to group norms around capital market participation, our results highlight the importance of identity domains. Gender and ethnic identity were associated with lower capital income, whereas educational and political identity were linked to higher capital income. These patterns persisted across different groups and income strata. Importantly, the predictive power of social identities was comparable to traditional sociodemographic variables. This study extends social identity research to understudied economic behaviours and contributes to the emerging fields of identity economics and the psychology of inequality.

Keywords: social identity; identity economics; economic inequality; capital income; household data; United Kingdom (search for similar items in EconPapers)
JEL-codes: J1 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2026-01-31
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Published in British Journal of Social Psychology, 31, January, 2026, 65(1). ISSN: 0144-6665

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