Imagine two people who are both having trouble paying their bills. One of them keeps hearing that the economy is booming. The other believes the economy is falling apart. You might assume the person who thinks things are going well would feel more hopeful about their situation. A new study suggests the opposite may be true.
Writing in Social Psychology Quarterly, a team of researchers examined how people’s beliefs about the broader economy relate to their personal sense of control over their lives. They found evidence that, among people who are struggling financially, believing the economy is doing well is linked to a greater feeling of powerlessness than believing it is doing poorly or just fairly.
The puzzle of the “vibecession”
The study begins with a widely discussed disconnect. In recent years, surveys in both the United States and Canada have recorded persistently gloomy public assessments of the economy, even as some standard economic measures looked reasonably healthy. Commentators nicknamed this mood the “vibecession,” a sense that people’s feelings about the economy had drifted away from the hard numbers.
Jiarui (Bruce) Liang, a doctoral student at Yale University, worked with Alexander Wilson and Scott Schieman of the University of Toronto to ask a related question. Sociologists have long documented that financial strain, meaning the difficulty of paying bills and affording basics like food and housing, is associated with a heightened sense of powerlessness. Powerlessness here means the belief that your own actions cannot really shape what happens to you. The researchers wanted to know whether a person’s read on the overall economy changes the strength of that link.
Earlier research had mostly used objective measures, such as local unemployment rates, as a stand-in for economic conditions. The authors point out that few studies have directly measured what people believe about the economy. That gap matters, they argue, because perceptions may carry their own weight, separate from official statistics.
Four competing predictions
The team laid out four possible ways economic perceptions might reshape the relationship between financial strain and powerlessness. They grouped them into two opposing sets.
The first set proposed that a bad economy makes things worse and a good economy makes things better. The “amplified threat” idea holds that seeing a poor economy could deepen powerlessness among strained individuals, because a weak economy signals few opportunities to climb out of trouble. Its counterpart, “protective economic optimism,” suggests that seeing a good economy could soften the blow, offering reassurance that escape routes exist.
The second set flipped the logic. The “comparison protection” idea draws on social comparison theory: if the economy looks bad, struggling people may feel less alone, since hardship seems widely shared, which could ease the sting. Its counterpart, the “meritocratic attribution” idea, is the one the study ultimately supports.
This last prediction rests on the belief, common in North America, that success comes mainly from talent and hard work. The researchers reason that when someone is struggling in what they perceive to be a strong economy, they may conclude that others are managing fine and that their own difficulties are their personal fault. Drawing on the philosopher Michael Sandel and on research into “learned helplessness,” the authors suggest this internal blame could spread into a broader sense that one cannot control life’s outcomes.
How the study was built
To test these ideas, the researchers analyzed two nationally representative surveys of working adults, one in the United States with 2,466 respondents and one in Canada with 2,501 respondents. Both were collected in late 2023, a period the authors describe as a peak of public chatter about the economy, and both used identical questions, making the two countries directly comparable.
Powerlessness was measured with four statements, such as agreeing that “you have little control over the things that happen to you.” Financial strain was measured with questions about how often people had trouble paying bills or affording necessities. To capture economic perceptions, respondents rated economic conditions in their country as “poor,” “only fair,” “good,” or “excellent.” The team combined “good” and “excellent” into a single category and used “fair” as the point of comparison.
The researchers ran linear regression models, a standard statistical tool for measuring how variables relate while accounting for other factors. They controlled for education, age, household income, job type, living arrangement, race, gender, and political affiliation, since political leaning is closely tied to how people rate the economy.
What the analysis revealed
As expected, financial strain was positively associated with powerlessness in both countries. On its own, how people rated the economy showed no significant link to powerlessness.
The pattern changed when the researchers looked at how the two factors combined. In both the United States and Canada, the connection between financial strain and powerlessness was stronger among people who saw the economy as good than among those who saw it as fair or poor. In plain terms, for people already under financial pressure, believing the economy was thriving was tied to feeling more powerless, not less.
The other side of the story did not hold up. The researchers found no evidence that seeing a poor economy weakened the link between financial strain and powerlessness compared with seeing a fair one. So the “comparison protection” idea, that shared hardship might feel reassuring, received no support here. Only the “meritocratic attribution” prediction matched the data.
One detail stands out. Among people with no financial strain at all, those who saw a good economy actually reported somewhat lower powerlessness than those who saw a poor economy. It was specifically the combination of personal struggle and a rosy view of the economy that was linked to the highest powerlessness.
Two countries, similar patterns
The researchers had expected the United States and Canada might differ. Drawing on the sociologist Seymour Martin Lipset, who argued that Canadians tend to place somewhat less emphasis on meritocracy than Americans, they wondered whether a “good economy” would carry a different meaning north of the border. Instead, they found what they call “remarkably similar patterns” in both countries.
The authors offer two readings of this similarity. Either the shared belief in meritocracy is strong enough in both nations to produce the same effect, or the two countries have grown more alike in these beliefs since Lipset wrote decades ago. They note their data cannot settle the question.
What it does and does not show
The researchers are careful to flag the limits of their work. The data are cross-sectional, meaning they capture a single moment rather than tracking people over time, so the findings are associations rather than proof of cause and effect. They also point out that the direction could run the other way: a person’s existing sense of powerlessness might color how they rate the economy.
The study cannot pin down exactly why the pattern appears. The authors describe two possible mechanisms, feeling unjustly deprived compared with others and blaming oneself under the assumption that hard work pays off, but the data do not let them separate the two.
They also caution that the results may reflect the particular moment of late 2023, a period following the pandemic when the economy was a hot topic. The relationship might look different in calmer times, or when most people believe the economy is weak rather than strong. Finally, the study measures perceptions of the national economy, and the authors speculate that views of one’s local economy could operate differently.
Still, the researchers argue their central finding adds a twist to the ongoing conversation about the gap between economic feelings and economic facts. Much of that discussion has treated negative “vibes” as the problem. This study offers evidence that, at least for the connection between financial strain and a sense of control, believing in a good economy may carry its own quiet cost for those left behind by it.
