The Bad Side of a Good Economy: Perceptions of the Economy, Financial Strain, and Powerlessness

• In Event: 30869 - Open Topics in Social Psychology

Abstract

How do economic perceptions moderate the association between financial strain and powerlessness? This paper tests four novel hypotheses using two nationally representative samples of American (N = 2,466) and Canadian (N = 2,501) workers collected in late 2023. While the amplified threat and protective economic optimism hypotheses suggest that, for those who are financially struggling, perceiving the economy as poor leads to more powerlessness and perceiving it as good leads to less powerlessness respectively, the comparison-protection and meritocratic attribution hypotheses propose the opposite. We find support for the meritocratic attribution hypothesis in both countries. Those who are financially struggling report higher levels of powerlessness if they perceive a good economy than if they perceive the economy as either poor or fair. In other words, we find evidence that perceiving a good economy while financially struggling is associated with greater powerlessness. By contrast, we do not find evidence that perceiving a poor economy makes financial strain’s association with powerlessness weaker.

Keywords: Powerlessness, Financial Strain, Vibecession, Economic Perceptions, U.S.-Canada comparison

Authors

• Jiarui Liang, Yale University

• Alexander Wilson, University of Toronto

• Scott Schieman, University of Toronto