The Effects of Local Economic Conditions on Confidence in Key Institutions and Interpersonal Trust after the Great Recession

Abstract

The effects of recessions on social and political attitudes are likely smaller than the effects on employment, income, and wealth, but relatively modest aggregate effects may be masking differences in attitudes between individuals who live in areas most and least affected by recessions. To investigate social and political attitudes in geographical context, we exploit a new data source that matches individuals to their county of residence to analyze whether changing economic conditions at the county level are associated with changing confidence in major social institutions and with changing levels of interpersonal trust. We find that individuals in particularly affected counties are more likely to decrease their support for organized labor and the federal government. County-level hardship does not appear to be associated with changes in interpersonal measures of trust, however, suggesting that two very different processes may be at play.