Wednesday, October 29, 2008

identity, values, coping styles and economic downturn

A further aspect of the link between declines in economic status and psychological well-being is the extent to which psychological constructs can provide ways of thinking about who suffers worse for a given level of economic decline.

A number of attempts have occurred in recent years to incorporate identity into economic analysis including work by Akerlof and Kranton. Viewing business failure and unemployment as identity threats is clearly one route to trying to explain the very large effects on well-being and, in particular, why they seem to be independent of income losses.

One psychological construct that is particularly relevant to this is the idea of "contingencies of self-worth". The review by Crocker and Knight below is a good overview of the concept

"Abstract—We argue that the importance of self-esteem lies in what people believe they need to be or do to have worth as a person. These contingencies of self-worth are both sources of motivation and areas of psychological vulnerability. In domains of contingent self-worth, people pursue self-esteem by attempting to validate their abilities and qualities. This pursuit of self-esteem, we argue, has costs to learning, relationships, autonomy, self-regulation, and mental and physical health. We suggest alternatives to this costly pursuit of self-esteem."

http://www3.interscience.wiley.com/journal/118706337/abstract

As well as identity, a number of papers have shown that political values can moderate the relationship between socio-economic status and self-esteem

http://www3.interscience.wiley.com/journal/118502361/abstract?CRETRY=1&SRETRY=0

To my knowledge, there is not a wide literature on how values and identity condition the psychological response to deterioration in economic circumstances. I have been looking through some papers on the role of coping styles in moderating the effect of unemployment on psychological distress such as the paper below.

http://ideas.repec.org/a/eee/joepsy/v22y2001i4p461-482.html

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