Recession Angst

It can't be easy being a College Republican recruiter these days.

With the economy in tatters and signs that recent graduates are more interested in philanthropy than finance, the traditional business-friendly message of John McCain-types is undoubtedly falling on many deaf, young ears.

And now there's some proof that this more than mere conjecture.

Looking at two different global surveys which ask respondents about economic beliefs, a new working paper finds that people who lived through negative economic shocks like recessions were more likely to support government redistribution, believe that luck has more to do with success than effort, align themselves with the political left, and have less faith in the president, Congress, and, oddly, organized labor. (The research, conducted by Paola Giuliano of Harvard University and Antonio Spilimbergo of the I.M.F., also found that being Protestant reduced the taste for redistribution.)

"The impact seems to be pretty big," Giuliano told me. "If people live in bad macroeconomic times, then they seem to systematically move to the left."

And the effect was only relevant for those who were between 18- and 25-years-old when the rough times hit. The reason? That's when our core beliefs and values are formed. In fact, the researchers found that bad economic times had very little ideological influence on people older than 25 and those who didn't live through a recession during their formative years.

Other studies looking at how economic beliefs are formed have shown that people who lived through stock market booms are more likely to be risk seekers, and corporate managers who were alive during the Great Depression spent the company money more conservatively.

In the new study, Giuliano and Spilimbergo also found that left-leaning effects lasted through the age of 41, so, depending on how bad you think the current downturn will be, the next 20 years could be auspicious ones for the Democrats.

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