Formative Year Financial Crises and Future Prosocial Attitudes: Evidence from the European Social Survey

Abstract

There is an extensive social science literature that examines the impact of formative experiences on individuals’ preferences. In particular, the impact of financial crises on prosocial behavior has receive a good deal of attention. Almost all such analyses focus on the effect of a crisis on prosocial behavior while the crisis is on-going. Using the European Social Survey, I analyze the effect of financial crises during an individual’s formative years, 18 to 25, on the probability they exhibit prosocial attitudes as adults. I find that experiencing a financial crisis during formative years increases one’s probability of being prosocial by 1.5 percentage points and that effect is statistically significant. This effect persists throughout life and does not decrease with age. The effect, however, does differ by education and income. It is more pronounced for individuals who achieve higher levels of education and who are higher earners later in life.

Keywords: generosity, selfishness, financial crises, formative years, Europe

JEL Classification: D64