HCEO Co-director Steven Durlauf sat down with us during last year's Summer School on Socioeconomic Inequality to talk about his research. Much of Durlauf's work relates to his "memberships theory of inequality," meaning that social factors influence inequality.

"In economics, the logic of choice is driven by the interaction of preferences, constraints and beliefs," Durlauf says, each of which has a social component. "The introduction of these social factors, when it's done through the particular formalism of this type of interdependence which I call complementarity, becomes a theory of group-level inequality."

Durlauf notes that a person's choices situate them in a specific environment, where they are influenced by their peers. "When people have socially-determined aspects of choice, in turn, to the extent that they can, they're going to wish to influence these social environments in which they function," he says. Social interactions produce incentives for segregation. In his research, Durlauf tries to understand how the "interactive nature of different environments" creates these incentives.

"Cross-sectional inequality enhances or creates segregation," he says. "Segregation creates disparities in the life courses of children, and those disparities in turn transmit the socioeconomic status of the parents to the children." Durlauf lectured on the social determinants of inequality at SSSI Chicago.
"The objective in much of my research is to understand the equilibrium consequences of social influences, as well to understand to what extent empirical analysis can reveal their distinct role," he says.
Durlauf is Vilas Research Professor and Kenneth J. Arrow Professor of Economics at the University of Wisconsin–Madison. He is also the Editor of the Journal of Economic Literature.