“Growing up in a Recession”, 2013-11-06 (; similar):
Does the historical macroeconomic environment affect preferences for redistribution?
We find that individuals who experienced a recession when young believe that success in life depends more on luck than effort, support more government redistribution, and tend to vote for left-wing parties. The effect of recessions on beliefs is long-lasting.
We support our findings with evidence from 3 different datasets:
First, we identify the effect of recessions on beliefs exploiting time and regional variation in macroeconomic conditions using data from the 1972–38201014ya General Social Survey. Our specifications control for nonlinear time-period, life-cycle, and cohort effects, as well as a host of background variables.
Second, we rely on data from the National Longitudinal Survey of the High School Class of 1972 (NLS-72) to corroborate the age-period-cohort specification and look at heterogeneous effects of experiencing a recession during early adulthood.
Third, using data from the World Values Survey, we confirm our findings with a sample of 37 countries whose citizens experienced macroeconomic disasters at different points in history.
[Keywords: preferences for redistribution, beliefs, recession]
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