Retracted: Growing up in a Recession

Giuliano, Paola; Spilimbergo, Antonio

doi:10.1093/restud/rdt040

Cited by 550 publications

(421 citation statements)

References 36 publications

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“…In particular, our paper provides evidence on a channel through which this effect might operate: recessions destroy social capital that is needed for productive cooperation. Our results are consistent with Giuliano and Spilimbergo (2014) who show that people facing recessions and macroeconomic disasters in their formative years have distinctly different beliefs -supporting government redistribution and voting for left-wing parties. Our results are also consistent with Fisman et al (2013) who show in a laboratory setting that people who experience losses are more likely to behave selfishly.…”

supporting

confidence: 91%

Effect of Income on Trust: Evidence from the 2009 Crisis in Russia

Guriev

Ananiev

2014

SSRN Journal

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This paper draws on a natural experiment to identify the relationship between income and trust.We use a unique panel dataset on Russia where GDP experienced an 8 percent drop in 2009. The effect of the crisis had been very uneven among Russian regions because of their differences in industrial structure inherited from the Soviet times. We find that the regions that specialize in producing capital goods, as well as those depending on oil and gas, had a more substantial income decline during the crisis. The variation in the industrial structure allows creating an instrument for the change in income.After instrumenting average regional income, we find that the effect of income on generalized social trust (the share of respondents saying that most people can be trusted) is statistically and economically significant. Controlling for conventional determinants of trust, we show that 10 percent decrease in income is associated with 5 percentage point decrease in trust. Given that the average level of trust in Russia is 25%, this magnitude is substantial. We also find that post-crisis economic recovery did not restore pre-crisis trust level. Trust recovered only in those regions where the 2009 decline in trust was small. In the regions with the large decline in trust during the crisis, trust in 2014 was still 10 percentage points below its pre-crisis level.

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supporting

confidence: 91%

Effect of Income on Trust: Evidence from the 2009 Crisis in Russia

Guriev

Ananiev

2014

SSRN Journal

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“…Survey-based studies find a positive association between low economic status and stated preferences for redistributive taxation and spending (12)(13)(14)(15)(16). However, although these surveybased results are consistent with our conjecture, they are also consistent with pure self-interest; purely self-interested individuals would state a preference for minimal or no redistribution when they are relatively well-off as this would minimize their tax burden, but would shift to favoring redistribution on becoming relatively poor owing to job loss (17).…”

mentioning

confidence: 99%

Moral consequences of becoming unemployed

Barr

Moya

Úbeda

2016

Proc. Natl. Acad. Sci. U.S.A.

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We test the conjecture that becoming unemployed erodes the extent to which a person acknowledges earned entitlement. We use behavioral experiments to generate incentive-compatible measures of individuals' tendencies to acknowledge earned entitlement and incorporate these experiments in a two-stage study. In the first stage, participants' acknowledgment of earned entitlement was measured by engaging them in the behavioral experiments, and their individual employment status and other relevant socioeconomic characteristics were recorded. In the second stage, a year later, the process was repeated using the same instruments. The combination of the experimentally generated data and the longitudinal design allows us to investigate our conjecture using a difference-in-difference approach, while ruling out the pure selfinterest confound. We report evidence consistent with a large, negative effect of becoming unemployed on the acknowledgment of earned entitlement.U nderstanding how becoming unemployed affects people's reasoning is important. Unemployment and the poverty it engenders is associated with depression, anxiety, stress, low subjective well-being and self-esteem, heightened aversion to risk, and a greater tendency to discount the future within the individual (1-7), and higher rates of suicide, murder, and alcoholrelated death across countries (8, 9). We investigate a different kind of effect, a moral consequence of unemployment that, alongside unemployment's effects on mental health, could explain why people are disengaging from the labor market (10). We test the conjecture that becoming unemployed erodes the extent to which a person acknowledges earned entitlement, i.e., acknowledges an individual's right to keep, consume, or dispose of that which was gained through his or her own effort or endeavor. This right and its acknowledgment underpins labor market functioning and guides taxation and government-spending policy worldwide (11).Survey-based studies find a positive association between low economic status and stated preferences for redistributive taxation and spending (12-16). However, although these surveybased results are consistent with our conjecture, they are also consistent with pure self-interest; purely self-interested individuals would state a preference for minimal or no redistribution when they are relatively well-off as this would minimize their tax burden, but would shift to favoring redistribution on becoming relatively poor owing to job loss (17).We used behavioral experiments to generate incentivecompatible measures of individuals' tendencies to acknowledge earned entitlement that cannot be driven by pure self-interest (18). We incorporated these experiments into an unusual two-stage study. In the first stage, participants' acknowledgment of earned entitlement was measured by engaging them in the behavioral experiments, and their individual employment status and other relevant socioeconomic characteristics were recorded. In the second stage, a year later, the process was repeated using the sa...

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“…Looking at welfare attitudes, Margalit (2013) finds that voter preferences regarding welfare policy depend strongly on personal economic circumstances, but also that these attitudes do not persist: as job losers regain employment, their support for redistribution decreases significantly. In contrast, Giuliano and Spilimbergo (2014) show that the effect of recessions on beliefs is long-lasting. Individuals who experienced a recession when young are more likely to believe that success in life depends more on luck than effort, support government redistribution, and vote for left-wing parties.…”

Section: Introductionmentioning

confidence: 79%

“…On the other hand, there is evidence that norms can change relatively rapidly. Beliefs can be affected significantly by macroeconomic and wealth shocks (Ananyev and Guriev 2013;Di Tella et al 2007;Fisman et al 2013;Giuliano and Spilimbergo 2014;Grosjean et al 2013), access to information (Kuziemko et al 2013) and political experiences (Alesina and Fuchs-Schündeln 2007). We review these contributions in more detail, particularly as they relate to the Ukrainian context, in the next section of the paper.…”

Section: Introductionmentioning

confidence: 99%

The Great Recession and social preferences: Evidence from Ukraine

Haas

Djourelova

Nikolova

2016

Journal of Comparative Economics

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We use detailed survey data to document stark differences between West and East Ukraine when it comes to household attitudes toward market-based economies and democratic institutions. Along both of these dimensions, Eastern Ukrainians are decidedly less supportive of liberal systems. We also find that economic attitudes changed in response to the global financial crisis. West Ukrainian households who were affected more extensively by the crisis were more disappointed with the market and private ownership, while in Eastern Ukraine economic attitudes became less pro-market across the board. Our evidence suggests that attitudes and values are determined by both deep-rooted factors and more transient macroeconomic shocks. * We would like to thank Sergei Guriev for many helpful discussions and advice, Yuriy Gorodnichenko and participants at the JCE Symposium on Ukraine for useful comments, and Hayk Gyuzalyan for assistance with data on Ukrainian media. The views expressed in this paper are those of the authors only and not necessarily of the EBRD.

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Retracted: Growing up in a Recession

Cited by 550 publications

References 36 publications

Effect of Income on Trust: Evidence from the 2009 Crisis in Russia

Effect of Income on Trust: Evidence from the 2009 Crisis in Russia

Moral consequences of becoming unemployed

The Great Recession and social preferences: Evidence from Ukraine

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