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Identity Economics

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Identity Economics

How Our Identities Shape Our Work, Wages, and Well-Being

Princeton UP,

15 min read
10 take-aways
Audio & text

What's inside?

Discover the human story of individual identity’s impact on economics.

Editorial Rating



  • Innovative


Biting into an economic text often tastes like dry toast, but this book has flavor and a lot of soul. George A. Akerlof, the 2001 Nobel laureate in economics, and Rachel E. Kranton, an economics professor, showcase their innovative exposition with a refreshing style. They muster examples from playground politics to courtroom theatrics to explain how race, gender and class shape individual economic decisions. Now and then, they get stuck in academic prose and repeated explanations about the difference between their persuasive identity-based model and traditional economic analysis, but the model does persuade. The authors offer generous servings of tasty facts, chewy analysis and lively case histories. This is economics seasoned with real-life spice. getAbstract recommends their book to specialists in persuasion, consumer product managers, educators and anyone trying to read the tea leaves of economic patterns.


A New Model

Traditional economic studies describe people’s actions with academic theories and number-crunching garnishments based on salaries and consumption patterns. In contrast, identity-based models add new elements to the financial mix by examining race, gender and other social factors that shape personal and professional decisions. That interplay among economics, identity and social behavior sets the scene for “identity economics.” How does this concept work?

Consider the career of Ann Hopkins. As an employee in an accounting firm’s Washington, DC, government services unit during the late 1970s, Hopkins had a solid reputation. She gained clout by locking down a $25 million contract from the US State Department. That deal broke the firm’s record for consulting contracts, and the federal client was pleased with her work. Hopkins earned a spot on the partner track, but the firm did not promote her. During the partner review process, her co-workers labeled her abrasive and manly. Critics griped about her management style. Some even urged her to take lessons in feminine charm, with special attention to beauty and styling.

Turning to the Civil Rights Act’s Title...

About the Authors

The 2001 Nobel laureate in economics, George A. Akerlof is a professor of economics at the University of California, Berkeley. He co-wrote Animal Spirits with Robert J. Shiller. Duke University economics professor Rachel E. Kranton is a scholar in the economics of networks.

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