Published online by Cambridge University Press: 28 July 2020
Previous research has either equated religion- and language-based group identities or asserted that their social effects are the same. This article proposes a novel differentiation between religious and ethnic self-identification that accounts for in-group income inequality and the social role of the group. The study argues that ethnicity-based identities tend to be associated with economic activities, thereby increasing the demand for income equality within such groups. Religious identities, on the contrary, are centered around noneconomic activities and have the ideological framework for reconciling material inequalities. The observable implication of this distinction is that the high-, low-, and middle-income categories of the multicultural society will display differential association with ethnic and religious identities. Ethnic groups will have lower in-group income inequality as a result of the exclusion of the poor and the departure of the rich. Religious groups, on the contrary, will have higher in-group income inequality due to the capacity of religion to accommodate both poor and rich. Relevant empirical tests from the ethnically and religiously diverse Russian North Caucasus region indicate support for the proposed theory.