The New Palgrave Dictionary of Economics Online

The many contemporary characterizations of stigma share the assumption that individuals have characteristics that devalue them in the eyes of others. The observer's response leads to status loss and discrimination. Stigmatized attributes, their linkage to a particular set of stereotypes and the general response to those stereotypes are shared within a particular ingroup, and thus are fundamental to social identity. Stigmatization affects the allocation of resources through direct discrimination, self-fulfilling beliefs, and identity threat.