Are Recessions Good for Morality? Evidence that Ethical Behavior Improves When the Economy Falters

Recent research has shown that ethical behavior can be influenced by features of the immediate environment such as the presence of a cheater or the characteristics of a room. We suggest ethical behavior is similarly shaped by a more diffuse and enduring situational feature: the state of the economy. Building on work showing that prosperity fuels overconfidence, risk-taking, and greed, we argue that ethical behavior improves when the economy falters. Five studies spanning diverse populations and different types of misconduct find support for this hypothesis. During prosperous economic times, companies were more likely to submit regulatory filings that would later be restated for fraud (Study 1), academics were more likely to publish papers that later would be retracted (Study 2), Major League Baseball pitchers were more likely to try to harm opposing batters (Study 3), and students were more likely to steal, damage property, shoplift, and submit plagiarized work (Studies 4 and 5). While a large body of res...