Growing Up in a Recession: Beliefs and the Macroeconomy

This is the keynote at the 11th IZA/CEPR European Summer Symposium in Labour Economics that starts tomorrow:

Growing Up in a Recession: Beliefs and the Macroeconomy

Do generations growing up during recessions have different socio-economic
beliefs than generations growing up in good times? We study 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, we show 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, we find that recessions have a long-lasting effect on individuals’ beliefs.

Paola Giuliano (UCLA) & Antonio Spilimbergo (IMF)