  The form of political polarization where citizens develop strongly negative
attitudes towards out-party policies and members has become increasingly
prominent across many democracies. Economic hardship and social inequality, as
well as inter-group and racial conflict, have been identified as important
contributing factors to this phenomenon known as "affective polarization." Such
partisan animosities are exacerbated when these interests and identities become
aligned with existing party cleavages. In this paper we use a model of cultural
evolution to study how these forces combine to generate and maintain affective
political polarization. We show that economic events can drive both affective
polarization and sorting of group identities along party lines, which in turn
can magnify the effects of underlying inequality between those groups. But on a
more optimistic note, we show that sufficiently high levels of wealth
redistribution through the provision of public goods can counteract this
feedback and limit the rise of polarization. We test some of our key
theoretical predictions using survey data on inter-group polarization, sorting
of racial groups and affective polarization in the United States over the past
50 years.

General Economics;Economics