Macropsychological Factors Predict Regional Economic Resilience During a Major Economic Crisis

TLDR

Prior studies of economic resilience have emphasized infrastructure, but psychological factors are increasingly recognized as key drivers of economic behavior. The study investigates whether macropsychological factors predict regional economic resilience during a major crisis. The authors analyze large US and UK datasets (n≈1.35 million) to link regional psychological traits with changes in entrepreneurial vitality following the 2008–2009 recession. Regions with higher emotional stability and entrepreneurial personality traits experienced significantly less economic slowdown, an effect that persisted after controlling for infrastructure, indicating that macropsychological factors may protect against macroeconomic shocks.

Abstract

Do macropsychological factors predict “hard” economic outcomes like regional economic resilience? Prior approaches to understanding economic resilience have focused on regional economic infrastructure. In contrast, we draw on research highlighting the key role played by psychological factors in economic behaviors. Using large psychological data sets from the United States ( n = 935,858) and Great Britain ( n = 417,217), we characterize region-level psychological correlates of economic resilience. Specifically, we examine links between regions’ levels of psychological traits and their degree of economic slowdown (indexed by changes in entrepreneurial vitality) in the wake of the Great Recession of 2008–2009. In both countries, more emotionally stable regions and regions with a more prevalent entrepreneurial personality makeup showed a significantly lower economic slowdown. This effect was robust when accounting for regional differences in economic infrastructure. Cause cannot be inferred from these correlational findings, but the results nonetheless point to macropsychological factors as potentially protective factors against macroeconomic shocks.