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Abstract

A large number of studies have shown that economic inequality, as a macro social environmental factor, has a significant impact on individual's unethical behavior, but its psychological mechanisms have not been well understood. Based on the existing literature, this paper proposes a three-level model in which economic inequality affects unethical behavior through societal (e.g., immoral and competitive normative climates), interpersonal (e.g., relative deprivation, risk-seeking tendency), and intrapersonal (e.g., perceptions of unfairness, moral disengagement) psychological process. Visibility of inequality, socioeconomic status, power, attributions for inequality, system-justifying beliefs, descriptive framework of inequality may moderate the relationship between economic inequality and unethical behavior. The three-level model helps us understand the mechanisms by which economic inequality affects unethical behavior, and provides a framework for future research on the impact of economic inequality on people's psychology and behaviors. Future research should further explore the potential differences in the impact of subjective and objective economic inequality on unethical behavior, as well as the potential differences in the effects of economic inequality on various types of unethical behavior. It is also necessary to explore other potential explanatory mechanisms and moderating factors, and to conduct cross-cultural studies on the subsequent effects of economic inequality.

Keywords

Economic inequality unethical behavior psychological mechanisms moderating factors three-level model

Introduction

Globally, the richest 1% own approximately 50% of the wealth, while the poorest 70% own only 3% (Starmans et al., 2017). This unequal distribution of resources and wealth in a society is known as economic inequality (Wienk et al., 2021). Since the twenty-first century, nearly half of the countries in the world have experienced an increase in economic inequality (Savoia, 2017). Economic inequality not only has a negative impact on mental health (Oishi et al., 2011), but also significantly affects individuals’ behavior, especially unethical behavior.

Unethical behavior refers to the actions that are detrimental to others and society, and which violate the social norms and regulations (Gino & Pierce, 2009). Researchers have explored the relationship between economic inequality and unethical behavior from different perspectives. For example, a large number of studies have shown that inequality in economic distribution is associated with an increase in crime rates (Daly et al., 2001; Hsieh & Pugh, 1993; Wilkinson & Pickett, 2017). Economic inequality has also been found to be closely related to corruption. Research has found that economic inequality at the national level (Gini coefficient) is positively correlated with the degree of corruption in this country (Apergis et al., 2010; Khan & Naeem, 2020; Jong-Sung & Khagram, 2005; Policardo & Carrera, 2018; Wei et al., 2023). At the individual level, people exposed to higher economic inequality exhibited more corrupt behaviors (Wei et al., 2023; Yan & Wen, 2020). In addition to crime rates and corruption, the relationship between economic inequality and dishonesty has also received extensive attention. Analysis of U.S. Gini coefficients and income underreporting rates from 1947 to 1999 reveals that escalating economic inequality correlates with a rising trend in tax evasion (Bloomquist, 2003). Neville (2012) utilized search information related to academic dishonesty (e.g., free research papers, seeking help for cheating) from search engines (Google) between 2003 and 2011 and state-level economic inequality index (Gini coefficient), and found that academic dishonesty was more likely to come from states with higher levels of income inequality. At the individual level, individuals exposed to high economic inequality exhibit a greater reluctance to return lost wallets (Du et al., 2021). Further research has also revealed that economic inequality leads to reduced cooperation and prosocial behavior (Lin et al., 2024; Yang & Konrath, 2023), while simultaneously increasing the incidence of disruptive conduct (Grosch & Rau, 2020).

Given the growing attention to the relationship between economic inequality and unethical behavior, the question arises as to what underlying psychological mechanisms explain the effect of inequality on unethical behavior? Some researchers have explored this question from specific perspective. For instance, Du et al. (2021) investigated how economic inequality affects dishonest behavior and found that inequality reduced altruistic concerns, thereby reducing people's desire to return a lost wallet. Wei et al. (2023) argued that the desire for wealth and the perception of unfairness are the reasons why economic inequality leads to corrupt behavior. According to the normative information model (Sánchez-Rodríguez et al., 2023), Sun et al. (2026) found that economic inequality promoted unethical behavior by increasing the perception of immoral and competitive normative climates. These studies undoubtedly provide valuable insights into how economic inequality affects unethical behavior. However, these mechanisms that focus on a few specific psychological processes only address part of the question, and did not provide a full picture.

Furthermore, the boundary conditions of the effect of economic inequality on unethical behavior remain substantially underexplored in existing research. Although the income inequality hypothesis, which holds that economic inequality is the key determinant of population health and social problems, has garnered considerable attention in recent years, it has been also subject to persistent critiques (Baek & Kim, 2018). One of the most prominent criticisms is that this hypothesis overlooks the effect of one's economic level (Rambotti, 2015). In light of the ongoing debate, we contend that a more comprehensive framework for understanding how economic inequality impacts unethical behavior should incorporate both inequality and potential moderating factors.

In this paper, we aim to provide a more comprehensive explanatory framework at the societal, interpersonal and intrapersonal levels to elucidate how economic inequality impacts unethical behavior. At the societal level, economic inequality shapes the culture, values, and social norms of a given society, creating a distinctive social normative climate. At the interpersonal level, economic inequality triggers a process of interpersonal comparison, thereby leading to a range of related psychological mechanisms (e.g., the enhancement of relative deprivation and risk-seeking tendency). At the intrapersonal level, economic inequality triggers a process of moral evaluation, by which individuals perceive and judge inequality through an ethical lens, consequently giving rise to a range of associated psychological mechanisms (e.g., the decline in perception of fairness, the increase in moral disengagement). On this basis, we propose a three-level model delineating how economic inequality affects unethical behaviors.

The Three-Level Psychological Mechanisms of Economic Inequality Affecting Unethical Behavior

Societal Level: The Role of Social Normative Climate

Socio-ecological factors shape specific social environments to which individuals must adapt, cultivating motivations, strategies, and behaviors that enhance their likelihood of survival (Wilkinson & Pickett, 2017). Therefore, socio-ecological factors play a critical role in shaping the culture, values, and social norms of specific regions (Chiu et al., 2010). During social interaction, economic inequality may serve as a cue for inferring others’ values and behaviors. Individuals may infer others’ motivations, beliefs, values, and anticipated social strategies or behavioral patterns based on the degree of economic inequality (Sánchez-Rodríguez et al., 2019). Within a given society, individuals experiencing comparable levels of inequality tend to develop a shared set of beliefs and values, thereby fostering a distinctive social normative climate (Sánchez-Rodríguez et al., 2022; Sánchez-Rodríguez et al., 2023).

Economic Inequality Affects Unethical Behavior by Weakening Moral Normative Climate

When people evaluate their own or others’ behavior, they use the general behavior of the majority as a benchmark. Once this behavior becomes a norm, people will consider it or similar behavior acceptable, even viewing it as a routine. Therefore, when the immorality repeatedly occurs and gradually intensifies, people will become accustomed to this phenomenon, not only failing to react to the gradual deterioration of moral standards, but also accepting it. Economic inequality is generally considered to be unfair, unjust, and morally unacceptable (Bruckmüller et al., 2017; Dietze & Craig, 2021; Franks & Scherr, 2019). When inequality becomes a social reality that is entrenched and difficult to change, it will provide a social cue for social members to infer the common values and behaviors of others, or in other words, forming a specific normative climate in society (Sánchez-Rodríguez et al., 2022; Sánchez-Rodríguez et al., 2023). And the moral aspect of such normative climate can be referred to as moral normative climate. That is, in societies with high inequality, the unfair, immoral, and illegitimate economic distribution as a social cue leads social members to infer that it is a common phenomenon to use unjust ways to gain profits in society (Neville, 2012; To et al., 2023). People in the same social background will gradually form shared beliefs or values about morality, which collectively contribute to the formation of moral normative climate (Kish-Gephart et al., 2010; Martin & Cullen, 2006). We contend that high levels of economic inequality will foster an environment characterized by immoral normative climate, marked by egoism, lack of kindness and lack of principle in society, which is supported by existing research. For instance, economic inequality has been found to alter individuals’ moral standards. Higher levels of inequality was related to increased acceptance of unethical behaviors and reduced condemnation of such conduct (To et al., 2023). Economic inequality also leads to diminished regard for procedural justice (Bratanova et al., 2016) and fosters more self-interested behavior (Dubois et al., 2015).

Moral normative climate in society can exert significant impact on people's unethical behavior. As early as the 1960s, Albert Bandura proposed the social learning theory which posits that people's social behaviors are influenced by the environment and are formed through the observation and learning of the surrounding environment (Bandura, 1965). Social norm theory also posits a similar view, holding that the way most people behave in society provides a descriptive norm that can guide individuals’ behavior (Cialdini & Trost, 1998). Researchers also use the “bad apple” or “bad barrels” effect to describe the impact of immoral others or immoral norms on people's behavior(O’Boyle et al., 2011). According to the theory of reasoned action, people will rationally calculate the costs and benefits of an action (Chang, 1998). When individuals are exposed to an immoral normative climate, they will change their assessment of the likelihood of expected punishment. For instance, when an individual observes that others’ immorality is not condemned, the expected punishment will be reduced which will further encourage the individual to behave immorally (Bai et al., 2016). Moreover, immoral normative climate can also lower moral salience, blur moral standards, making it easier and unconscious for people to engage in unethical behavior (Mazar et al., 2008).

Economic Inequality Affects Unethical Behavior by Increasing Competitive Normative Climate

In a society increasingly characterized by stratification and inequality, social status becomes more salient and class divisions continue to intensify (Bratanova et al., 2016; Jetten et al., 2017). Individuals exhibit a greater tendency to categorize and describe the world in terms of “haves” and “have-nots” (Peters et al., 2022). During social interactions, people pay heightened attention to wealth-related information—both their own and that of others—and place greater emphasis on the classification of their own social standing (Corak, 2013). An individual's position within the social hierarchy determines their priority in accessing scarce resources relative to others. Members of society must strive to maximize and maintain their standing in the social ranking system while mitigating the risk of being targeted by more dominant groups. Therefore, in societies characterized by greater inequality, individuals place heightened emphasis on their relative position within the social pyramid (Layte & Whelan, 2014; Walasek et al., 2018). Wilkinson and Pickett (2017) posit that members of a society evolve two distinct social strategies: one suited to hierarchical and unequal social structures, and another adapted to more egalitarian contexts. While both strategies coexist across all societies, their relative prevalence shifts in accordance with the degree of economic inequality. In societies characterized by equality, social strategies founded on reciprocity and cooperation will predominate. Conversely, in societies with heightened economic inequality, competitive strategies will become dominant (Wilkinson & Pickett, 2017). Similarly, Sánchez-Rodríguez et al. (2019) found that those living in unequal societies are more likely to perceive individualism in the social environment, speculating that interpersonal relationships are based on competition rather than cooperation. Economic inequality can also encourage more self-enhancement values, which means social members have a greater desire to pursue power and achievement, and strive to be superior to others (Sánchez-Rodríguez et al., 2022). To sum up, rising economic inequality will intensify social competition, fostering an environment characterized by competitive normative climate (Sánchez-Rodríguez et al., 2019; Sommet et al., 2019).

Competition is defined as a struggle for a certain resource among individuals, and the outcomes for competitors are usually contradictory, meaning that one's gains come from the loss of the other. Competition is considered to be an important factor affecting individual's moral decision making (Dissanayake, 2022; Pierce et al., 2013). When the competitive normative climate in social environment intensifies, people are more likely to resort to unethical or illegal means to achieve success in order to survive and maintain their status. Thus, competition can motivate individuals to behave unethically. For example, in laboratory interactive games, participants who competed more intensely with their interactive opponents were more likely to lie to each other and even merely recalling past experiences of competition can trigger individuals’ unethical tendencies and behaviors in unrelated fields (Kilduff & Galinsky, 2017). In competitive organizational situations, employees tend to sabotage others’ work or exaggerate their own performance in order to improve their own status (Charness et al., 2014).

Overall, when significant wealth disparity becomes normalized and taken for granted, the respect for and adherence to moral norms among social members will be substantially undermined, fostering an environment where immoral normative climates thrive. Concurrently, the stratification and heightened salience of social status resulting from inequality intensify a competitive normative climate. These immoral and competitive normative climates not only create fertile ground for immoral conduct but also incentivize the pursuit of individual interests at the expense of others’ rights and the collective welfare of society.

Interpersonal Level: The Process of Interpersonal Comparison

As we have mentioned before, in a society with high inequality, hierarchy and social status are more prominent, the differentiation of social class becomes more severe (Bratanova et al., 2016; Jetten et al., 2017), which not only breeds a social environment characterized by competitive normative climate, but also prompts people to pay more attention to and compare their own and others’ incomes and social status (Cheung & Lucas, 2016; Corak, 2013). The interpersonal comparison caused by economic inequality can trigger a series of psychological processes related to it, mainly including the following aspects.

Economic Inequality Affects Unethical Behavior by Inducing Relative Deprivation

Relative deprivation refers to the judgement that a person is at a disadvantage relative to a certain standard, accompanied by negative emotional responses such as anger and resentment (Smith et al., 2012). Interpersonal comparison is the premise for relative deprivation, which occurs when individuals find that others have something they do not have, or that others have more than they do. As noted earlier, economic inequality intensifies interpersonal comparisons among social members, especially highlighting the prominence of the wealthy group (Cheung & Lucas, 2016). As a result, inequality fosters a culture of upward comparison, promoting people to adopt a status-oriented lifestyle to “keep up” with others (Melita et al., 2023). For example, people tend to pay more attention to information related to high-income groups while browsing social media. Income inequality also increases the frequency of Google searches related to positional goods (e.g., luxury goods) (Walasek & Brown, 2015), as well as the pursuit of positional goods (Du et al., 2022). Thus, in societies where inequality is increasing, interpersonal comparison, especially upward comparison, becomes increasingly prominent, ultimately leading to people experiencing relative deprivation (Osborne et al., 2019).

Relative deprivation is believed to be the root cause of many social disorders (Wilkinson & Pickett, 2007, 2009). Individuals who feel deprived may satisfy their needs engage in unethical ways to, even if it conflicts with their long-term goals (Sharma et al., 2014). Studies have shown that feelings of deprivation can trigger widespread activation of the behavioral approach system (Yam et al., 2014). According to the reinforcement sensitivity theory, the behavioral approach system is a brain circuit related to approach and pursuit of potential rewards, and is the center of approach motivation, which provides motivations to the desired goal. When this system is activated, the activity of the mesolimbic dopamine system will increase in response to the presence of reward cues, causing individuals to enter a state of “wanting” or “desiring” and prompting them to focus on achieving their current goal, while ignoring long-term interests (Gable & Harmon-Jones, 2008). Given that unethical behavior can provide more immediate and direct gratification of needs, the activation of the behavioral approach system triggered by relative deprivation may lead individuals to engage in more unethical behavior (Yam et al., 2014). In addition, relative deprivation may also increase unethical behavior by leading to ego depletion. Relative deprivation is the result of social comparison, which is an individual's subjective perception of their disadvantaged position, accompanied by negative emotions. When negative emotions arise, individuals have to invest more control resources to regulate emotions, and the consumption of such control resources leads to ego depletion (Hagger et al., 2010). The depleted cognitive resources will in turn reduce individual's self-control ability, making it difficult for them to resist the temptation and impulse to engage in unethical behavior (Gino et al., 2011).

Economic Inequality Affects Unethical Behavior by Promoting Risk-Seeking Tendency

Economic inequality may lead to greater risk-seeking tendency, which is largely driven by upward social comparisons (Payne et al., 2017). The upward social comparison caused by economic inequality is an important factor affecting people's satisfaction of needs. Research has found that the income gap between one's own and others is a better predictor of life satisfaction than one's absolute income (Cheung & Lucas, 2016). Upward social comparison will make people feel inferior and want to get more to meet their own needs, which further promote people's transition from risk aversion to risk preference. According to the risk sensitivity theory, when people hold resources, they are more likely to exhibit risk aversion and prefer to make low-risk, low-return decisions. But as resources dwindle, people start to become risk-seeking, preferring high-risk, high-return options (Mishra & Fiddick, 2012). For example, in a soccer game, when team is behind, players are more likely to choose a risky pass over a safer and more conservative option. Research also found that when participants perceived that they were at a disadvantage compared to others, they tend to make more risky decisions. But the effect disappeared when they were unaware of their differences from others (Mishra et al., 2015). Therefore, upward social comparison can elevate individuals’ expectations and needs for better outcomes, which increases their risk-seeking tendency.

Unethical behavior itself is a type of risky behavior as people can obtain high returns but also face potential costs (such as punishment). The theory of reasoned action posits that individuals perform a cost-benefit analysis to evaluate the potential costs and benefits of an action prior to engaging in it (Chang, 1998). When the expected benefits of unethical behavior are higher than the expected costs, people are more likely to engage in it. High risk-seeking tendency will prompt people to adopt urgent strategies rather than more secure strategies to achieve goals. In cost-benefit analysis, people tend to place more emphasis on benefits and underestimate potential costs, thereby triggering more unethical behaviors. Furthermore, risk-seeking tendencies may also increase unethical behavior in a less conscious and calculated way. Research has shown that unethical behavior is sometimes the result of automated rather than conscious cognitive processes (Chugh et al., 2005). The unethical decisions are often characterized by impulsive, emotional, and rapid rather than rational thinking (Tenbrunsel et al., 2010). As a result, high-risk seeking tendencies may drive people to engage in more impulsive unethical behavior.

Overall, the interpersonal comparison process serves as a key psychological mechanism through which economic inequality affects unethical behavior. When economic inequality intensifies, people tend to feel a stronger sense of relative deprivation, which leads them to be more likely to resort to improper or unjust means to seek a “shortcut” to success. The expansion and solidification of social class caused by economic inequality makes social members more willing to engage in high-reward but high-risk behaviors. This risk-seeking tendency not only intensifies social instability, but also further promotes the spread of unethical behavior.

Intrapersonal Level: The Process of Moral Evaluation on Inequality

A crucial premise that economic inequality can significantly affect people's behavior is how people perceive and evaluate economic inequality. It is generally accepted that the issue of economic inequality has become a moral issue. That is, the unequal distribution of economic resources has sparked considerable concerns regarding the morality and legitimacy of inequality. Most people prefer to live in a society where the wealth gap is modest, or even completely equal, rather than in a society where the gap is massive (Norton & Ariely, 2011). People desire to reduce the inequality, even if it means sacrificing some of their own wealth (Dawes et al., 2007). However, the reality is that there is a huge gap between people's ideal distribution of wealth and the actual situation (Norton & Ariely, 2013), which considerably affects the perceptions of the morality and legitimacy of economic inequality (Dietze & Craig, 2021; Franks & Scherr, 2019). How people perceive and evaluate economic inequality is an important issue, as it determines how they think, feel, and behave (Bruckmüller et al., 2017). The moral evaluation of economic inequality and related psychological process mainly include the following aspects.

Economic Inequality Affects Unethical Behavior by Reducing Perceptions of Fairness

When the wealthiest 1% of people own approximately 50% of the wealth, while 70% of people only own 3% of the wealth, no one would consider such a distribution to be fair and just. Indeed, studies have found that both adolescents and adults tend to believe that unequal distribution is unfair. Adolescents who believe that social resources are distributed more equally have a more positive view of the fairness of their society, while the perception that social resources are distributed unequally makes their view of social justice more negative (Almås et al., 2010; Arsenio & Willems, 2017). Oishi et al. (2011) found that in years with higher income inequality, US citizens reported higher levels of perceived unfairness and lower levels of life satisfaction. In communities with higher levels of inequality, people are more likely to believe that their social distribution system is unfair and that those who succeed are operating in the shadows (Grosfeld & Senik, 2010). By manipulating people's perceived economic inequality, Wei et al. (2023) found that those assigned to the group with high inequality reported lower perceived fairness, and the result showed strong cross-cultural consistency.

Fairness and justice provide people with a sense of control, predictability, satisfaction, and trust in the complexity of social interactions, which is crucial for establishing cooperative and reciprocal relationships in social life (Jost & Kay, 2010). While the absence of fairness can easily lead to a sense of loss of control, unpredictability, and low trust (Cozzolino, 2011). Studies have found that low sense of control will lower people's moral standards and increase the acceptability of unethical behaviors (To et al., 2023). Unpredictability increases sense of meaninglessness and diminishes hope, undermining the inherent belief that effort leads to rewards, and thus causing people to resort to unconventional means to gain advantage (Simpson et al., 2012; Ucar et al., 2019). In addition, when people realize they have been treated unfairly, they will experience anger and are more likely to behave unethically (Motro et al., 2018). Therefore, the absence of fairness is an important reason why people engage in unethical behavior. For example, the perception of fairness in organizational performance evaluation increases the likelihood of employees making ethical decisions (Goksoy & Alayoglu, 2013), while the perception of unfairness leads people to take unethical measures to gain benefits (Wei et al., 2023).

Economic Inequality Affects Unethical Behavior by Inducing Moral Disengagement

Social cognitive theory proposes that an individual's moral consciousness and moral behavior are controlled by the self-regulatory system (Bandura, 1999). According to this theory, people's internal moral standards can regulate their behavior and guide them to act in accordance with own moral standards, thus preventing them from engaging in unethical behavior. Therefore, people's behavior usually aligns with their own moral standards in order to reduce self-blame and negative evaluations. However, when people are tempted by internal and external interests, they can also avoid self-blame and guilt caused by own unethical behavior through moral disengagement. Moral disengagement is a cognitive process that can selectively activate or deactivate the self-regulatory system (Bandura, 1999). People can free themselves from negative emotions such as self-blame and guilt by using moral self-justification or transferring responsibility, so that they are more likely to behave unethically. Previous studies have shown that there is a short-term and long-term relationship between moral disengagement and unethical behavior (Guo et al., 2023; Travlos et al., 2021).

Economic inequality may induce individuals’ moral disengagement. In general, people are reluctant to resort to unethical means to benefit themselves, as such ways not only violates the principle of fairness and harms others and collective interests, but also essentially threatens their own moral self-concept and causes psychological discomfort (Modesto & Pilati, 2020). However, when people perceive that the society is unequal and unjust, they are more likely justify their unethical behavior (Santalla-Banderali & Malavé, 2022). On the one hand, inequality provides an unfair descriptive norm that individuals use as a cue to infer that others may generally benefit from unjust practices. For example, research has shown that economic inequality can increase people's expectations of the prevalence of unethical behavior in society, which leads people to believe that their own unethical behavior is acceptable and in line with social norms (To et al., 2023). On the other hand, economic inequality can also lead to feelings of frustration and hopelessness, as well as distrust in others, groups, ideologies, social customs and institutions, which in turn encourage individual's moral disengagement (Buttrick & Oishi, 2017; Delhey & Dragolov, 2014). In addition, economic inequality also increases the perception of unpredictability (To et al., 2023). When people believe that their lives are largely out of their control and determined by fate or luck at random, they are more prone to moral disengagement (Detert et al., 2008).

Overall, the moral evaluation process of inequality constitutes another key psychological mechanism through which economic inequality affects unethical behavior. When individuals are exposed to economic inequality, perceived unfairness will gradually internalize as part of their worldview, which only leads them to question the existing social system, but also causes them to disregard and rebel against moral norms, making them more likely to accept and imitate unethical behaviors around them. Moral disengagement plays the role of “lubricant”, which allows individuals to evade moral responsibility when engaging in unethical behavior by employing a series of cognitive strategies, thereby maintaining inner peace and satisfaction. The moral evaluation process triggered by economic inequality weakens people's moral concepts and social responsibility, which eventually leads to social unrest and instability.

Boundaries Conditions of the Impact of Inequality on Unethical Behavior

Although the relationship between economic inequality and unethical behavior has received considerable attention in recent years, doubts also exist (Baek & Kim, 2018). For example, some researchers found that the relationship between economic inequality and crime rates is not robust, and may even be a spurious correlation (Brush, 2007; Choe, 2008; Messner & Tardiff, 1986; Neumayer, 2005; Saridakis, 2004). These findings suggest that potential boundary conditions must be considered when exploring the relationship between economic inequality and unethical behavior.

Visibility of Inequality

Since the inception of the inequality hypothesis, skepticism has persisted, largely attributable to the divergent effects of objective inequality and perceived inequality on psychological and behavioral outcomes. For instance, research has found that perceived inequality, rather than objective inequality, shapes individuals’ demands for wealth redistribution (Niehues, 2014). It was also found that objective inequality is associated with greater tolerance for inequality (Schroder, 2017), while perceived inequality is linked to lower tolerance for inequality (García-Castro et al., 2020). Given these inconsistent findings, it was argued that the psychological outcomes of economic inequality is primarily a product of perceived – rather than – objective inequality (Willis et al., 2022). The visibility of inequality refers to the extent to which people can perceive the inequality in society. When the objective inequality is substantial, yet the perceived level remains low, it indicates a low visibility of inequality. Research has found that there exists only a moderate correlation between objective and perceived, and people tend to underestimate the extent of inequality within society (Hauser & Norton, 2017). An important reason why people underestimate economic inequality might be that high levels of inequality intensify interpersonal isolation, which encompasses both physical isolation (i.e., the separation between the rich and the poor) and psychological isolation (i.e., people have a stronger sense of social identity with those in their own social class) (Willis et al., 2022). This isolation diminishes individuals’ exposure to economic diversity, thereby impeding their understanding of the distribution of financial resources within a given society and consequently constraining their perception of inequality. In summary, we posit that the impact of economic inequality on unethical behavior is contingent upon the visibility of inequality, with the effects becoming more pronounced when individuals are aware of economic disparities.

Socioeconomic Status (SES)

Economic inequality intensifies the differentiation of social classes and converges resources from the bottom of society to the top. As a result, economic inequality may have more negative effects on those with lower SES (Cheung & Lucas, 2016; Sommet et al., 2018). People with low SES live in environments with fewer resources, greater threats, and more uncertainty, which leads to more disadvantaged experiences, such as fewer educational opportunities, greater stress, and more unpredictable lives (Duncan & Murnane, 2011; Kraus et al., 2012; Stephens et al., 2012). Meanwhile, those with higher SES have higher incomes, more choices, and a more stable life (Stephens et al., 2014). Therefore, the psychological and behavioral consequences triggered by economic inequality may exhibit significant class variations. First, Compared to people with high SES, those with low SES are more likely to believe that a large wealth distribution gap is unjust (Brown-Iannuzzi et al., 2021; Vargas-Salfate et al., 2018a, 2018b). Economic inequality appears to establish immoral normative climate only for low SES populations. Empirical research indicates that individuals with lower SES are more inclined to perceive wealth accumulation among the affluent as stemming from illicit means (Jong-Sung & Khagram, 2005). In societies characterized by high economic inequality, trust is diminished exclusively among low SES groups. They tend to perceive others as less likely to treat them fairly and more inclined to take advantage of them (Oishi et al., 2011). Meanwhile, individuals with low SES, due to limited economic resources, experience and perceive intensified competitive normative climate both objectively and subjectively. Second, people with low SES are more likely to experience feelings of unfairness than those with high SES. Oishi et al. (2011) found that economic inequality only weakens the perceived fairness among lower-income Americans rather than higher-income Americans. Third, people with low SES experience more upward social comparisons (Cheung & Lucas, 2016). In societies with high economic inequality, people with low SES have higher status anxiety (Delhey & Dragolov, 2014), are more likely to pursue positional goods (Du et al., 2022), experience greater relative deprivation (Callan et al., 2017), and make more risky decisions (Mishra et al., 2015) compared to those with high SES. In summary, people with low SES may perceive stronger immoral and competitive normative climates, regard economic inequality as morally less acceptable and engage more frequently in upward social comparisons, which make them more likely to behave unethically.

Power

Power is typically defined as the asymmetrical control over valued resources within social relationships (Magee & Galinsky, 2008). Economic inequality not only intensifies class stratification, but also widens the power distance within society, leading to a relatively polarized distribution of control over valuable resources (Daniels & Greguras, 2014). Research has demonstrated that power can exert a significant influence on diverse psychological processes, cognitive patterns, and behavioral manifestations. For instance, it has been found that power can diminish people's perspective taking (Galinsky et al., 2010; Sun et al., 2021), encourage more goal-setting and goal-directed actions (Guinote, 2007), increase social distance and dehumanization (Lammers et al., 2012; Lammers & Stapel, 2011), enhance people's self-serving bias in the attribution (Lammers & Burgmer, 2019). In terms of morality, individuals with high power possess greater control over valuable resources and can more readily achieve desired outcomes compared to those with low power, which reduces their dependence on others. This diminished dependency lessens the social pressure on high-power individuals to adhere to societal norms or engage in prosocial conduct (Lammers et al., 2015). In addition, power can enhance behavioral disinhibition and prompt individuals to focus more intently on their own needs and objectives, thereby increasing the likelihood of taking immediate action to fulfill present demands (Lammers et al., 2015). Therefore, Individuals with high power may engage in more unethical behaviors, which has been substantiated by numerous empirical studies (DeCelles et al., 2012; Lammers et al., 2010; Liu et al., 2019; Magee & Langner, 2008). Consequently, when pronounced economic inequality engenders power disparity, individuals with high and low power may develop divergent perceptions of such inequality, along with differing propensities for engaging in unethical conduct. However, it is important to note that some perspectives posit that power does not invariably lead to negative outcomes. Under certain conditions, power may even yield positive results, potentially contingent upon more complex moderating factors such as cultural context and personality traits (Lammers et al., 2015; Sun et al., 2021).

System-Justifying Beliefs

System justification theory holds that people tend to believe that their social system is fair and just, and are motivated to defend, support, and justify the social status quo (Jost & Kay, 2010). The belief that society is fair and just can satisfy a range of needs for individuals to survive in society, such as the existential need to seek safety and reduce threats, the cognitive need to reduce uncertainty, and the need to build relationships with others (Jost & Hunyady, 2005). System justification serves to explain or rationalize social systems by providing appropriateness and justification for differences in authority, power, status, or wealth (Tyler, 2006, p. 376). People with high system-justifying beliefs generally believe that inequality is not only justified, but also natural and necessary. While defending the system is not conducive to the establishment of social justice, system-justifying beliefs can buffer the negative effects of inequality, especially for disadvantaged groups, by alleviating suffering, reducing negative emotions, and promoting well-being (Bahamondes et al., 2020; Brandt, 2013; Li et al., 2020; Vargas-Salfate et al., 2018a, 2018b). Additionally, system-justifying beliefs can also reduce individuals’ aversion to inequality, weaken support for wealth redistribution, and suppress a variety of negative emotional responses (e.g., anger, resentment) that can inspire unethical behaviors (Goudarzi et al., 2020; Starmans et al., 2017; Wakslak et al., 2007). In short, system-justifying beliefs lead individuals to believe that economic inequality is fair and morally acceptable, thereby reducing people's unethical intentions and behaviors.

Attributions for Inequality

People's attributions for inequality can generally be divided into internal attributions and external attributions (Davidai, 2018). Internal attribution, also known as personal factor attribution, refers to that people attribute a person's poverty or wealth to personal internal factors. For example, poverty is usually attributed to factors such as laziness, lack of self-discipline, and lack of planning, while wealth is usually attributed to hard work, strong abilities, planning, and self-discipline. External attribution, also known as situational attribution, refers to the tendency to use external environmental factors to explain a person's financial success or failure. For example, explaining social inequality in terms of structural inequality, or attributing others’ economic success to the result of social development. The attribution for inequality provides an explanation for people's preference for inequality (Starmans et al., 2017). That is, in some cases (e.g., in Western elitist cultures), people tend to believe that the wealth people obtains is the result of their effort (internal attribution), which provides a justification for unequal distribution of wealth (Son Hing et al., 2011). The different attributions for economic inequality determine individual's psychological and behavioral responses when facing inequality, such as the attitude towards economic inequality. Those who attribute inequality to internal factors believe that disadvantaged groups should be mainly responsible for own economic conditions, thus increasing support for restrictive social welfare policies. In contrast, situational explanations for inequality make people generate more sympathy for disadvantaged groups, increasing the willingness to help the disadvantaged people and the support for redistribution (Piff et al., 2020).

Therefore, the internal attribution for economic inequality can decrease people's perception of the illegitimacy and unfairness of inequality, while the external attribution deepens people's aversion to inequality and perception of unfairness, and stimulates the motivation to restore equality. The differences in perceived fairness caused by different attributions for inequality are reflected in the childhood stage. In middle childhood, individuals are able to take into account the personal and situational factors behind inequality when allocating resources (Rizzo & Killen, 2016). Children perceive inequality based on internal factors (e.g., ability) as fair, and they tend to allocate more resources to those who are more capable and work harder to maintain inequality (Hamann et al., 2014; Rizzo & Killen, 2016; Schmidt et al., 2016). However, when children believe that inequality is due to situational factors (e.g., group bias, discrimination, etc.), they are more likely to allocate more resources to disadvantaged groups to alleviate this inequality (Elenbaas & Killen, 2016; Olson et al., 2011; Rizzo et al., 2020). In summary, compared to external attributions for inequality, internal attributions can decrease people's perception of unfairness and immoral normative climate in society, thereby reducing moral disengagement and unethical behavior.

Descriptive Framework of Inequality

Economic inequality can be described in two logically equivalent but opposing ways: the rich have more than the poor (i.e., the rich advantage framework), or the poor have less than the rich (i.e., the poor disadvantage framework). Under the rich advantage framework, the rich occupy the positions of the subject of comparison, while the poor occupy the position of the referent, and vice versa under the poor disadvantage framework (Bruckmüller et al., 2017). In general, the referent is implicitly regarded as the standard in the comparison, so the subject and its characteristics are particularly prominent and are used to compare with the referent (Hegarty & Bruckmüller, 2013). For example, under the poor disadvantage framework, the rich is seen as the standard, and the characteristics of the poor (e.g., the hardships they endure) become prominent. People will frame this inequality as a negative deviation from the standard. While, under the rich advantage framework, poverty is seen as the standard, and the characteristics of the rich (e.g., a lifestyle characterized by affluence) would become prominent. People will frame this inequality as a positive deviation that exceeds the standard.

The descriptive framework of inequality may have completely opposite effects on the moral evaluation on inequality and the interpersonal comparison. On the one hand, the descriptive framework of inequality can significantly affect people's moral perception and evaluation of inequality. Research has found that inequality is considered unjust only under the poor disadvantage framework rather than the rich advantage framework (Bruckmüller et al., 2017). Moreover, portraying economic inequality as the poor having less (as opposed to the rich having more) also increases support for actions to reduce inequality, because inequality within the disadvantage framework (as opposed to the advantage framework) is perceived as more unfair (Dietze & Craig, 2021). Thus, the poor disadvantage framework can increase the perceived unfairness and illegitimacy of inequality, which in turn increases the likelihood of people engaging in unethical behavior. On the other hand, the descriptive framework of inequality may also affect people's interpersonal comparison process. Under the rich advantage framework, the characteristics of the rich are more prominent, which leads people to make more upward social comparison, and thus perceiving more competitive normative climate, greater relative deprivation, and higher risk-seeking tendency. While under the poor disadvantage framework, the characteristics of the poor are more prominent, and people tend to compare downwards, resulting in lower perception of competitive normative climate, lower relative deprivation, and lower risk-seeking tendency (Cheung & Lucas, 2016; Mishra et al., 2015; Osborne et al., 2019).

Implications and Future Directions

Economic inequality has become a widespread problem around the world, playing important role in social unrest and conflict. It is crucial to explore how and why economic inequality impacts individual's psychology and behavior. Given the growing attention to the relationship between economic inequality and unethical behavior, this paper proposes a three-level model in which economic inequality affects unethical behavior through societal, interpersonal and intrapersonal psychological processes, and discusses the potential boundary conditions (see Figure 1). The three-level model helps us understand the mechanisms by which economic inequality affects unethical behavior, and provides a framework for future research on the impact of economic inequality on people's psychology and behaviors. Future research can be carried out from the following aspects.

Figure 1.

The three-level model of the effect of economic inequality on unethical behavior.

First, future research needs to explore research methods with more ecological validity. The existing literature on the relationship between economic inequality and unethical behavior primarily comes from the fields of economics, sociology, or criminology. These studies mainly use objective and macro measures of economic inequality (e.g., Gini coefficient) to explore the relationship between economic inequality and unethical behaviors at the national or state level (e.g., crime rates, tax aversion). However, there are some deficiencies in using objective and macro indicators of inequality. For example, it assumes that people from the same country or states with the same Gini coefficient have similar experiences of inequality. However, it will be an ecological fallacy if ignoring the fact that the degree of inequality experienced by people from different communities or towns can vary greatly. Additionally, people’ perceived inequality usually does not correspond to the objective level of inequality. Subjective perceptions of economic inequality has stronger effect on people's psychology and behavior, and may even produce opposite psychological consequences to objective economic inequality (Du & King, 2022). Therefore, the study of economic inequality should not only focus on objective inequality, but also incorporate perceived inequality into existing theoretical and empirical research. There are currently limited research methods for perceived inequality that involve inducing participants to briefly experience the level of inequality in their own society, or manipulating the degree of economic inequality in virtual societies, both of which have limitations (e.g., the influence of own knowledge about inequality, lack of ecological validity). Therefore, future research can try to manipulate participants’ perceptions of economic inequality by presenting social scenarios about inequality through virtual reality, or use diary methods to ecologically and effectively verify the dual-path model.

Second, future research needs to explore the differences in the effects of economic inequality on different types of unethical behavior. There are different types of unethical behaviors, such as violence, corruption, and dishonesty, and not all unethical behaviors belongs to the scope of law. Most of the unethical behavior in daily life is not against the law and relatively hidden. The psychological mechanisms and boundaries by which economic inequality affects different types of unethical behavior may be different. Although existing research on unethical behavior mostly focus on dishonest behavior that aims to gain profit (Lu et al., 2018), moral foundation theory holds that moral content, goes beyond cheating, also includes harm, betrayal, subversion, and degradation (Graham et al., 2013). Therefore, unethical behavior based on other moral content also needs to be included in the framework of research on the effects of economic inequality. In addition, whether and how unethical behavior based on altruistic motives (e.g., pro-organizational unethical behavior, benevolent dishonesty, etc.) is affected by economic inequality is an interesting question that needs to be further explored. Thus, future studies can further clarify the types of unethical behavior and the potential differences in the impact of economic inequality on different unethical behaviors, thus further testing the applicability and generalizability of the three-level model.

Third, future research needs to explore other potential explanatory mechanisms and moderators for the effect of economic inequality on unethical behavior. For example, economic inequality may affect individual's unethical behavior by increasing interpersonal distance and reducing interpersonal sensitivity and empathy, and increasing social dominance. As for the moderating factors, future research could explore which personality trait factors would moderate the impact of economic inequality, as a social environmental factor, on unethical behavior. For example, personality traits closely related to moral behavior, such as agreeableness, conscientiousness, honesty-humility, and moral identity, need to be given due attention. In addition, the moderating role of age also needs to be further explored, as an important issue has not been well understood yet. Do individuals at different ages have different psychological and behavioral responses to economic inequality? Future research could explore this issue through large-scale questionnaire surveys spanning multiple age groups or longitudinal follow-up studies.

Last, cross-cultural research on the impacts of economic inequality on people's psychology and behavior should be carried out in the future. Given the obvious cultural and value differences among different countries, the subsequent impacts of economic inequality may also show significant cultural variations. China is a country characterized by collectivism, high interdependence, high system justification and high power distance, while Western culture is characterized by individualism, elitism, low interdependence, low system justification and low power distance (Stephens et al., 2012). Collectivism places greater emphasis on collective interests, advocating that personal interests should be subordinate to collective interests. Thus, in collectivist cultures, people may be more tolerant of economic inequality and have fewer negative reactions. Individualism emphasizes personal interests, freedom, and autonomy, and tend to view the world from an individual-centered perspective. People in individualistic cultures may be less tolerant of inequality, leading to more negative reactions. In addition, cultural tightness-looseness, which refers to the severity of social norms and the degree of tolerance for deviance, may also play a crucial moderating role (Stamkou et al., 2019). In tight cultures, social norms are strong and deviance is less tolerated, while in loose cultures, social norms are weaker and people are more tolerant of deviance. Therefore, people in tight cultures are more likely to follow social norms in order to avoid punishment than people in loose cultures. Cultural factors may also interact with other moderating factors such as SES and inequality attribution, and jointly affect unethical behavior. Future studies can explore the cross-cultural consistency or difference of inequality effect as comprehensively as possible by collecting cross-cultural samples.

Conclusion

Economic inequality has a significant impact on individuals’ unethical behavior, but the underlying psychological mechanisms remain unclear. We addressed this topic by proposing a three-level model from societal, interpersonal, and intrapersonal perspectives. From the societal perspective, economic inequality fosters an environment where immoral and competitive normative climates thrive, which not only creates fertile ground for immoral conduct but also incentivize the pursuit of individual interests at the expense of others’ rights and the collective welfare of society. From the interpersonal perspective, economic inequality triggers interpersonal social comparisons, which further affect sense of relative deprivation and risk seeking tendency, ultimately affecting unethical behavior. From the intrapersonal perspective, economic inequality triggers a process of moral evaluation, by which individuals perceive and judge inequality through an ethical lens, which leads to changes in the perceptions of fairness and moral disengagement, ultimately affecting unethical behavior. Visibility of inequality, SES, power, attributions for inequality, system-justifying beliefs, and descriptive framework of inequality play crucial moderating roles in the relationship between economic inequality. The three-level model helps us understand the mechanisms by which economic inequality affects unethical behavior, and provides a framework for future research on the impact of economic inequality on people's psychology and behaviors.

Footnotes

ORCID iDs

Peng Sun

Yu Kou

Funding

The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This research was supported by National Natural Science Foundation of China [32471122], National Social Science Foundation of China [24CSH087], and Natural Science Foundation of Shandong Province [ZR2024QC338].

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

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