Growing economic inequalities are observed in several countries throughout the world.
Following Pareto, the power-law structure of these inequalities has been the subject of
much theoretical and empirical work. But their nonequilibrium dynamics, e.g. after a policy
change, remains incompletely understood. Hereweintroduce a thermodynamical theory of
inequalities based on the analogy between economic stratification and statistical entropy.
Within this framework we identify the combination of upward mobility with precariousness
as a fundamental driver of inequality. We formalize this statement by a ‘‘second-law’’
inequality displaying upward mobility and precariousness as thermodynamic conjugate
variables. We estimate the time scale for the ‘‘relaxation’’ of the wealth distribution after
a sudden change of the after-tax return on capital. Our method can be generalized to
gain insight into the dynamics of inequalities in any Markovian model of socioeconomic
interactions.