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Avoiding Last Place: Some Things We Don't Outgrow

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Avoiding Last Place: Some Things We Don't Outgrow

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Avoiding Last Place: Some Things We Don't Outgrow

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LAURA SULLIVAN, host: No one wants to be in last place - not on the playground, not on the racetrack, and certainly not on the socioeconomic ladder. And yet when people are near the bottom rung of that ladder, they actively oppose programs that could help the people below them, even if those programs could help them, too. That's according to a new study from the National Bureau for Economic Research.

It's a phenomenon called last-place aversion. And one of the study's authors, Ilyana Kuziemko, is here to explain it. Welcome to the program.

ILYANA KUZIEMKO: Thank you. Thanks for having me.

SULLIVAN: Explain to me just in layman's terms, what is last-place aversion?

KUZIEMKO: So it kind of is what it sounds like. It's the basic human need to avoid feeling like we, ourselves, are in last place. Or maybe put a bit more negatively, it's our need to feel like there's at least one person we can feel superior to or look down on. I think a way of understanding it, or thinking about it, is the sort of - back to childhood, that visceral fear that children have of being picked last in gym class or last at recess. You know, we've - sort of thinking that whatever makes us have such a visceral fear of being picked last in gym class probably doesn't go away just because we grow up.

SULLIVAN: Where did the idea for the study come from?

KUZIEMKO: I think this idea has been in my head for a while, and in part from sort of reading historical accounts of the United States, especially sort of the rise of Jim Crow. So C. Vann Woodward's study on the rise of Jim Crow, for example, argues that this was something that was a lot more important to relatively poor Southern whites than it was to sort of the plantation class.

And these institutions, you know, the way I thought about it, was - were really important for relatively poor whites so they could have permanently and sort of officially a group they could always look down on.

SULLIVAN: Tell me about the study that you conducted. What happened?

KUZIEMKO: The heart of the study are two experiments that we performed in laboratory settings with students and also, members of the community who volunteered to be part of these studies. So in the first experiment, people are randomly assigned a dollar amount, and they're separated each by $1. So one person has $1, $2, $3, up to $6. And at that point, each player is given an extra $2, but they can't keep it themselves.

So they have to either give that extra $2 to the person immediately above them in the distribution, or immediately below them. And the important thing to realize is that because everyone's separated by $1, giving to the person below you means that he would leapfrog over you in the distribution. So he would be a higher rank than you would be.

So what happens is that most people tend to give it to the person below them. They can't keep the money themselves. So no matter what they do, they're walking out with the same amount of money. But when you start to get toward the bottom of the distribution, and specifically the guy who's second to last, he's - almost half the time chooses to give - he or she - chooses to give the extra money to the person who is actually richer than he is, as opposed to giving it to the person below him. You know, we would hypothesize because it's so painful to have that one person below you jump over you.

SULLIVAN: Do you see any real-life examples of this?

KUZIEMKO: The real-world example that we looked at was the minimum wage. We started to oversample people who were making relatively low wages, and asked their opinion about whether the minimum wage should be increased. And most people said yes. In fact, like, if you look at any national survey, the minimum wage is a very - increasing the minimum wage is a very popular policy. But there was a real spike downward in the support for increasing the minimum wage among people who are making just above it.

You know, there could be any number of things going on, but this is certainly consistent with their not wanting the, you know, just the couple of people below them who are still making the minimum wage to have the same wage that they do.

SULLIVAN: Do you think that the results of your study will affect the way we talk about public policy?

KUZIEMKO: I've certainly seen the paper linked on right-leaning blogs, sort of saying well, the poor don't want redistribution either so this is great; we should never have redistribution - which I think is a pretty narrow way of looking at it. But I think that another way of looking at it might be recognizing that there is a lot of status anxiety, specifically for people who are sort of lower in the distribution, and to be sensitive to that and maybe not being so sensitive to that undercut support for redistribution among people who rationally, we think should be supporting it.

SULLIVAN: Ilyana Kuziemko is an assistant professor of economics at Princeton University. Thanks so much for joining us.

KUZIEMKO: It's my pleasure. Thank you for having me.

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