Date Added: Sep 2009
Do generations growing up during recessions have different socio-economic beliefs than generations growing up in good times? This paper studies the relationship between recessions and beliefs by matching macroeconomic shocks during early adulthood with self-reported answers from the General Social Survey. Using time and regional variations in macroeconomic conditions to identify the effect of recessions on beliefs, it shows that individuals growing up during recessions tend to believe that success in life depends more on luck than on effort, support more government redistribution, but are less confident in public institutions. Moreover, it's found that recessions have a long-lasting effect on individuals' beliefs.