Scholars have demonstrated that economic inequality in America is closely correlated to political polarization among America's political elites. The connection between the two is explained by the fact that the public's partisanship has become income-stratified because of polarized redistributive preferences. However, the correlation between income and partisanship weakened after the year 2000, and there is no empirical evidence of polarization in redistributive preferences. It is also unclear whether inequality and polarization have a causal relationship because of the complicated and endogenous nature of both trends. In this dissertation, I argue that unequal economic growth leads to political polarization in the American public. Instead of positing that aggregate inequality causes polarization, I focus on the economic experiences of individual voters and their effect on policy attitudes and social identities. I demonstrate that individuals whose living standards have stagnated are likely to have more socially conservative attitudes, stronger in-group solidarity, and out-group derogation, while individuals whose well-being has improved over time are likely to have socially liberal attitudes.

To test this theoretical mechanism, I explore two aspects of my theory. First, I test whether income inequality and political polarization among the public are correlated and what dimension of policy preferences is polarized. I demonstrate that the degree of polarization within the public is very closely correlated with income inequality. Indeed, the correlation of income inequality with public polarization is as strong as the political polarization within Congress. Furthermore, I find that polarization is only present in identity politics with the social issues dimension, rather than the economic dimension. Second, I examine the individual and community effect of economic disruption. I show that individuals' fear of and anxiety about losing their economic status—the main psychological mechanism of my theory—causes them to have stronger racial resentment and ethnocentrism. Furthermore, I demonstrate that the regional economic disruption caused by Chinese imports causes voters to have more conservative attitudes about non-economic issues but not economic issues.