Identity economics meets financialisation: gender, race and occupational stratification in the US labour market

Throughout his career Geoff Harcourt has constantly and consistently highlighted the role of social norms and collective decisions in his study of modern economies. In doing so he has put a great deal of emphasis on the distribution of income between different social groups, especially so when concerned with the labour market. This article attempts to celebrate this particular aspect of his numerous contributions to economics by highlighting the role of social norms in influencing earnings across occupations and demographic groups in the USA. Social norms generate hierarchy, economic and non-economic inequalities amongst ascriptively distinguished groups. Drawing on the stratification and identity economics literatures, this article proposes a novel theoretical and empirical framework for analysing the effects of financialisation on the earnings dynamics of gender and race groups, a framework that is consistent with discrimination as a source of racial and gender inequality. The empirical methodology used in the form of long-run cointegrating relationships of groups’ earnings across occupations assesses whether a pattern of social norms on wage distribution emerges over time. The results of this study show that over the past 30 years social norms have exacerbated the stratification of the US labour market.