How Recessions Can Influence Views On Social Spending

During economic downturns it’s understandable if certain people become more stingy about the way public money is spent. When the pie is smaller, you want to make sure pieces of it aren’t being given away to those who are undeserving. But what makes somebody undeserving? Can recessions influence whether people are seen as worthy of help, and thus influence preferences for resource distribution beyond what one might expect?

New research (pdf) by a group of TCU psychologists suggests that the answer is yes. In two experiments white participants were primed with thoughts of hardship or prosperity and then shown photos of biracial faces. The researchers found that participants primed with thoughts of economic hardship were less likely to categorize the faces as white.

The results suggest that in a bad economy people are less likely to think of somebody as part of their in-group. For example, during an economic boom you might feel that 64% of Americans are part of your in-group — hard working people who deserve government help if they need it. But when the economy tanks you may begin to feel that only 53% of Americans are part of that in-group. (Or put another way, that 47% of Americans take no personal responsibility.)

Because our tribal evolution has left us with a desire to protect our own groups, perceiving your group to be smaller means you’re less likely to support policies that help a broad range of people. This could partly explain why austerity can become popular when the economy is bad. Not only does scarcity make people people want to keep public funds out of the hands of the out-group, it makes people more likely to see that out-group as larger.
Rodeheffer, C., Hill, S., & Lord, C. (2012). Does This Recession Make Me Look Black? The Effect of Resource Scarcity on the Categorization of Biracial Faces Psychological Science DOI: 10.1177/0956797612450892


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