(credit: Flickr user FreddieBrown)
Unemployment obviously has economic effects on people, but it can also have psychological impacts, sometimes triggering depressive episodes. However, until now, there has been no quantitative research evaluating consequences of unemployment on people’s feelings about money. A study published in PNAS finds that unemployment changes how people think about entitlement.
The study defines entitlement as the acknowledgement that someone has a right to keep, consume, or dispose of things that they have earned, including their salary. The idea of entitlement is important for understanding the labor market and workers’ self-interest. Generally, people who earn a higher income tend to be more self-interested, with minimal preference for wealth redistribution, whereas lower-income individuals tend to think that wealthier people should pay more taxes and poorer people should be eligible for social support.
The study examined participants’ attitudes on wealth redistribution and wealth entitlement twice, with a year-long gap between experiments. This setup allowed the researchers to study people who transitioned between various states of employment in the interim. The study was conducted in Spain, which has the third highest unemployment rate in the Organization for Economic Cooperation and Development. The attrition rate was 48 percent between the two experiments, and this paper focuses on 151 participants who were either employed or students for both experiments, or employed/students for the first experiment and unemployed for the second.
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