Work and Organizations
Researchers have long documented a significant wage gap between White and Black workers, at least some of which is attributable to discrimination. Drawing on research suggesting that discrimination increases during recessions, we test whether the racial wage gap expands during economic downturns. Using longitudinal wage data from the Panel Study of Income Dynamics over a 40-year time period (N = 18,954), we find that the wage gap between Black and White workers increases with the unemployment rate. Moreover, we find that the cyclical wage gap is more pronounced in states in which Whites hold more negative attitudes about Blacks and in states with larger Black populations, suggesting that the racial wage gap expansion during recessions is at least partially driven by discrimination. Finally, we find evidence for at least two mechanisms by which the wage gap expands during recessions. First, we find that Black workers are more likely to lose their jobs during downturns and earn lower wages upon reemployment than comparable Whites. Second, we find that Black hourly workers are slightly more likely to have their hours reduced during recessions than White hourly workers, thereby resulting in lower earnings. These findings suggest that the racial wage gap widens during recessions and that discrimination accounts for at least some of this expansion.
Personality and Social Psychology Bulletin
As rates of intergenerational social mobility decline, it is increasingly important to understand the psychological consequences of entrenched socioeconomic privilege. Here, we explore whether current and childhood socioeconomic status (SES) are interactively related to entitlement, such that among currently high SES individuals, those from affluent backgrounds are likely to feel uniquely high levels of entitlement, whereas currently low SES individuals feel low entitlement regardless of their backgrounds. A meta-analysis of four exploratory studies (total N = 3,105) found that currently high SES individuals who were also raised in high SES households were especially inclined to report feeling entitled, a pattern that was robust across three indicators of SES: income, education, and subjective SES. Results of a preregistered, confirmatory study (N = 1,058) replicated this interactive pattern for education and subjective SES, though not for income. Our findings highlight the importance of considering current and childhood SES jointly to understand the psychological consequences of SES.
Current Opinion in Psychology
While recessions are a regular feature of modern economic life, researchers have only recently begun to explore their psychological implications. This review examines evidence that recessions are linked to changes in how people regard themselves and others. Specifically, it reviews work suggesting that recessions are associated with declines in individualism and increases in interdependence. It also reviews evidence indicating that economic turmoil is associated with greater racial animosity. Finally, it considers some psychological processes underlying these effects.
Scholars have long argued that economic downturns intensify racial discord. However, empirical support for this relationship has been mixed, with most recent studies finding no evidence that downturns provoke greater racial animosity. Yet most past research has focused on hate crimes, a particularly violent and relatively infrequent manifestation of racial antipathy. In this article, we reexamine the relationship between economic downturns and racial acrimony using more subtle indicators of racial animosity. We found that during economic downturns, Whites felt less warmly about Blacks (Studies 1 and 2), held more negative explicit and implicit attitudes about Blacks, were more likely to condone the use of stereotypes, and were more willing to regard inequality between groups as natural and acceptable (Study 2). Moreover, during downturns, Black musicians (Study 3) and Black politicians (Study 4) were less likely to secure a musical hit or win a congressional election.
Journal of Personality and Social Psychology
Past work has shown that economic growth often engenders greater individualism. Yet much of this work charts changes in wealth and individualism over long periods of time, making it unclear whether rising individualism is primarily driven by wealth or by the social and generational changes that often accompany large-scale economic transformations. This article explores whether individualism is sensitive to more transient macroeconomic fluctuations, even in the absence of transformative social changes or generational turnover. Six studies found that individualism swelled during prosperous times and fell during recessionary times. In good economic times, Americans were more likely to give newborns uncommon names (Study 1), champion autonomy in children (Study 2), aspire to look different from others (Study 3), and favor music with self-focused language (Study 4). Conversely, when the economy was floundering, Americans were more likely to socialize children to attend to the needs of others (Study 2) and favor music with other-oriented language (Study 4). Subsequent studies found that recessions engendered uncertainty (Study 5) which in turn tempered individualism and fostered interdependence (Study 6).
We examine whether prosperous economic times have both immediate and lasting implications for corporate misconduct among chief executive officers (CEOs). Drawing on research suggesting that prosperous times are associated with excessive risk-taking, overconfidence, and more opportunities to cheat, we first propose that CEOs will be more likely to engage in corporate misconduct during good economic times. Next, we propose that CEOs who begin their careers in prosperous times will be more likely to engage in self-serving corporate misconduct later in their careers. We tested these hypotheses by assembling a large data set of American CEOs and following their stock option reporting patterns between 1996 and 2005. We found that in good economic times, CEOs were more likely to backdate their stock options grants. Moreover, CEOs who began their careers in prosperous times were more likely to backdate stock option grants later in their careers. These findings suggest that the state of the economy can influence current ethical behavior and leave a lasting imprint on the moral proclivities of new workforce entrants.
Social Psychological and Personality Science
Does access to money predict social behavior? Past work has shown that money fosters self-sufficiency and reduces interest in others. Building on this work, we tested whether income predicts the frequency and type of social interactions. Two studies using large, nationally representative samples of Americans (N = 118,026) and different measures of social contact showed that higher household income was associated with less time spent socializing with others (Studies 1 and 2) and more time spent alone (Study 2). Income also predicted the nature of social contact. People with higher incomes spent less time with their families and neighbors and spent more time with their friends. These findings suggest that income is associated with how and with whom people spend their time.
Despite widespread interest in narcissism, relatively little is known about the conditions that encourage or dampen it. Drawing on research showing that macroenvironmental conditions in emerging adulthood can leave a lasting imprint on attitudes and behaviors, I argue that people who enter adulthood during recessions are less likely to be narcissistic later in life than those who come of age in more prosperous times. Using large samples of American adults, Studies 1 and 2 showed that people who entered adulthood during worse economic times endorsed fewer narcissistic items as older adults. Study 3 extended these findings to a behavioral manifestation of narcissism: the relative pay of CEOs. CEOs who came of age in worse economic times paid themselves less relative to other top executives in their firms. These findings suggest that macroenvironmental experiences at a critical life stage can have lasting implications for how unique, special, and deserving people believe themselves to be.
Administrative Science Quarterly
This paper examines whether earning a college or graduate degree in a recession or an economic boom has lasting effects on job satisfaction. Across three studies, well-educated graduates who entered the workforce during economic downturns were more satisfied with their current jobs than those who entered during more prosperous economic times. Study 1 showed that economic conditions at college graduation predicted later job satisfaction even after accounting for different industry and occupational choices. Study 2 replicated these results and found that recession-era graduates were more satisfied with their jobs both early and later in their careers and even when they earned less money. A third cross-sectional study showed that people who entered the workforce in bad economies were less likely to entertain upward counterfactuals, or thoughts about how they might have done better, and more likely to feel grateful for their jobs, both of which mediated the relationship between economic conditions at workforce entry and job satisfaction. While past research on job satisfaction has focused largely on situational and dispositional antecedents, these results suggest that early workforce conditions also can have lasting implications for how people affectively evaluate their jobs.