How our employment status affects our morals around money

   
   
 Money445
12 Apr 2016 11:33:57.810

Becoming unemployed changes people’s morals around the distribution of money, says a new study from The University of Nottingham.

Understanding how becoming unemployed affects people’s reasoning is important. Unemployment and the poverty it causes are associated with depression, anxiety, stress, low well-being and self-esteem.

Unemployment is also associated with higher rates of suicide, murder, alcohol related death and disengagement from the labour market.

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Moral consequences of unemployment

In the study – ‘Moral consequences of becoming unemployed’- academics from The University’s School of Economics and the School of Economics and Business at the University of the Basque Country, look at a different kind of effect. A moral consequence of unemployment, which alongside unemployment’s effects on people’s mental health, could explain why people are disengaging from the labour market.

Dr Abigail Barr, an Associate Professor in The University of Nottingham’s School of Economics, and one of the authors of the study, says: “On the whole, people in employment or full-time education believe that people should be allowed to keep much of what they earn and that it is OK for those who work harder or who are more productive to earn more.

“When people become unemployed, our study indicates that they let go of this belief. They put a higher value on the re-distribution of money, which, in everyday life, would mean higher taxes for high earners in order to fund public spending on services and benefits.

Moral shift

“In our study, we didn’t ask questions about re-distribution, taxes and benefits as the findings from this kind of research can be driven by self-interest. Self-interested high earners will want less taxation, while self-interested low earners and unemployed people will want more taxation to fund public services and benefits. Instead, we wanted to find out whether becoming unemployed changes what people think is fair in terms of re-distribution, i.e., whether it changes their moral values. We found that it does – on becoming unemployed, people change the way they think about fairness and re-distribution.”

The investigation

In order to investigate people’s views on earned entitlement, the researchers involved 151 people in a ‘Distributive Justice’ game that was designed to reveal their values and preferences about fairness and re-distribution. Each of them played the game for money twice, a year apart.

The game had two parts. In the first part participants were ‘employed’ by the researchers for seven minutes.

In the second part of the games, each participant was given a tray divided into four sections. Each section contained a different amount of money (in tokens). One of the sections “belonged” to the participant who was given the tray. The other three belonged to the other members of the participant’s playing group.

For some groups the amounts of money on the tray depended on how much work people had done in the first part of the game. For others the amounts of money on the tray were random windfalls, unrelated to how much work they had done. They were then free to re-distribute the money across the four sections. They were able to take all of the others’ money, they could leave the distribution as it was, they could share all the money equally, they could re-distribute in whatever way they wished.

Dr Barr said: “We found that, in the game, the employed people and the students tended to re-distribute less when they knew people had earnt their money. They tended to re-distribute more, almost equally across others, when they knew the amounts were just windfalls.”

Changing views

By conducting the games twice, a year apart, the researchers were able to see whether the people who started as employed or in full-time education and ended up as unemployed changed their views about fairness and redistribution. They did.

Most of those who became unemployed re-distributed so that the other three in their group ended up with about the same amount of money regardless of whether the money was earned or windfalls.

Dr Barr adds: “The extent to which individuals believe that earned entitlement should be acknowledged has potential implications for the way they vote, how willing they are to pay their taxes, and whether and how they engage in the process of production. However, further research is needed.

 “The significance of the finding of this study for the dynamics of societies and the ideal policy response depends on how and how readily the effect is or can be reversed. Through further research, we need to establish whether unemployed individuals have to reacquire the value of earned entitlement before effectively reengaging with the labour market. Then, assuming they do, we need to investigate how this process occurs and whether and how different interventions enable the process.”

The full study will be published in Proceedings of the National Academy of Sciences of the United States of America.

— Ends —

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Notes to editors: The University of Nottingham has 43,000 students and is ‘the nearest Britain has to a truly global university, with a “distinct” approach to internationalisation, which rests on those full-scale campuses in China and Malaysia, as well as a large presence in its home city.’ (Times Good University Guide 2016). It is also one of the most popular universities in the UK among graduate employers and the winner of ‘Outstanding Support for Early Career Researchers’ at the Times Higher Education Awards 2015. It is ranked in the world’s top 75 by the QS World University Rankings 2015/16, and 8th in the UK by research power according to the Research Excellence Framework 2014. It has been voted the world’s greenest campus for three years running, according to Greenmetrics Ranking of World Universities.

Impact: The Nottingham Campaign, its biggest-ever fundraising campaign, is delivering the University’s vision to change lives, tackle global issues and shape the future. More news…

 

Story credits

More information or a full copy of the study is available from Dr Abigail Barr in the School of Economics at abigail.barr@nottingham.ac.uk
CharlotteAnscombe

Charlotte Anscombe - Media Relations & Campaign Manager

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