Social identity refers to how you label yourself depending on the groups to which you belong. For instance, your religion (Catholic, Jewish, atheist), political affiliation (Democrat, Republican, Independent) and vocation (writer, artist, neurosurgeon) can each frame how you approach life and even how others treat you.
You can have more than one social identity group (for example, nationality, gender and socioeconomic status), though some may be more important to you than other labels. Also, society is more accepting of some social identities than others; having AIDS or an addiction may elicit more stigma than pride.
Your own social identity affects how you relate to others. It can foster a sense of solidarity and support within groups but can also lead to in-group bias and out-group discrimination. For example, a hiring manager might display in-group favoritism if they hire someone the person with whom they share social identities instead of the one who is most fit for the role.
In experiments that Henri Tajfel and John Turner carried out, they found that people favored in-group members. They employed the minimal group paradigm (grouping people on flimsy commonalities) to learn more about how it affected in and out groups.
Tajfel and Turner developed social identity theory, which suggests that individuals' self-esteem derives from social identity groups.