Values and the Macroeconomy

Paola Giuliano

No 77, 2009 Meeting Papers from Society for Economic Dynamics

Abstract: Did Americans living in regions particularly hit by the Great Depressions become systematically more risk adverse and favorable to social security? Do generations growing in period of economic distress believe more in state intervention? We study the relationship between macroeconomic shocks and the formation of beliefs by matching self-reported individual answers with macroeconomic shocks during early adulthood defined as the years when the individual was between 18 and 25. We use the General Social Survey for the United States and the World Value Survey. We show that individuals who experience negative macroeconomic shocks especially during early adulthood support more government redistribution, believe that individual success depends more on luck than effort, and are less confident in institutions. These findings shed light on the importance of the historical economic environment in shaping economic attitudes and beliefs.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed009:77

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