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February 24, 2010

Lasting effects of recession

The recession has affected jobs, incomes and wealth. But is there any research to suggest that recessions change the way people look at the economy and government?

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"There is. ... In fact this is based on some new research that economists have done. What they find is a very curious result: They find that people who grew up, who have their formative years during recessions, number one, they tend to be more supportive of government intervention in the economy, particularly in terms of the government helping to support incomes during a recession.

"But number two -- number two, and this is very interesting -- those same people have less confidence in the government. That is to say that they want the government to do, to help, but they don't think the government is going to be very successful.

"And I think on the surface you would say, 'Boy, this is very contradictory.' But perhaps what is going on is people are just grasping at anything they can get. When economic times are bad, they want help. And they look to the government for help.

"But at the same time they may be saying, 'Well, I don't have a lot of confidence that this is going to help, but I don't really have any choice.'

"So it is very interesting how economic cycles can have impacts, in this case, on how we view the economy and how we view governments' role in that economy."

Posted by deeshore at February 24, 2010 07:35 AM