The Social Recession: How the Financial Collapse of 2008 Affected Americans' Assessments of Their Class, Employment Security, and Economic Prospects

Michael Hout, New York University (NYU)
Orestes P. Hastings, University of California, Berkeley

Cross-sectional data from the General Social Survey and other national surveys indicate that more Americans described themselves as lower class, much worse off, and similar terms implying mounting economic anxiety in 2008 and 2010 than in 2006; they rebounded somewhat in 2012. The timing of the changes suggests that the recession was important in how people ranked themselves. This paper fits counterfactual treatment models to the 2006-10 and 2008-12 GSS panel data to estimate the causal effects of job loss and income decline on these subjective assessments of social and economic status. We find substantial effects of job loss and significant effects of income change. We find no significant residual differences in 2008, 2010, and 2012, that is, for most outcomes, people who were not directly affected via job or income loss had no change in their class, subjective well-being, or view of the future.