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On the Effect of Business and Economic University Education on Political Ideology: An Empirical Note

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Abstract

We empirically test the hypothesis that a major in economics, management, business administration or accounting (for simplicity referred to as Business/Economics) leads to more-conservative (right-wing) political views. We use a panel dataset of individuals (repeated observations for the same individuals over time) living in the Netherlands, drawing data from the Longitudinal Internet Studies for the Social Sciences from 2008 through 2013. Our results show that when using a simple fixed effects model, which fully controls for individuals’ time-invariant traits, any statistically and quantitatively significant effect of a major in Business/Economics on the Political Ideology of these individuals disappears. We posit that, at least in our sample, there is no evidence for a causal effect of a major in Business/Economics on individuals’ Political Ideology.

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Notes

  1. Similar debates and contradicting findings exist in related studies on the effect of education on political participation, with the most recent literature, based on modern statistical methods, raising doubts on whether there is indeed a causal effect (Persson 2015).

  2. Instead, we are unaware of any empirical studies directly linking business studies to Political Ideology.

  3. However, this comes at a cost, as different degrees will produce differential levels of exposure to the principles of rationality, efficiency, performativity, and ultimately profit maximization and managerialism.

  4. Other relevant questions in the LISS panel that can be used to measure the economic and social dimensions of Political Ideology are preferences on (1) whether the government imposes more tax on the higher incomes or that it provides the poor with more abundant provisions, (2) euthanasia, (3) immigrants retaining their own culture, etc. As these preferences are more indirectly related to Political Ideology, especially as regards the effect of business/economic education, we decided to restrict our analysis to Political Ideology and inequality preferences.

  5. Other individual-specific characteristics like gender, origin, etc., drop out when using individual fixed effects.

  6. Because we use the log of this variable, we exclude individuals with debt or zero reported wealth. This exclusion decreases the number of observations but does not significantly change our main findings on the coefficient of Business/Economics.

  7. Other similar sources of individual survey data (e.g., the European Union Statistics on Income and Living Conditions, the Panel Study of Income Dynamics, the British Household Panel Survey, and the German Socioeconomic Panel) either do not track the same individuals over time or (mostly being the case) do not include information on the specific field of university education.

  8. In alternative specifications, we include the lagged Political Ideology variable in Eq. (1) to capture persistence in Political Ideology and also potentially mean-reverting dynamics (i.e., the tendency of the Political Ideology score to return to some equilibrium value for the same individual). In doing this, we can exclude the possibility that a change in Political Ideology causes a contemporaneous change in the decision to study business. We estimate these specifications with the generalized method of moments for dynamic panels (see Baltagi 2013). Our results resemble those reported in the empirical analysis section, and to avoid analytical complexity, we report only the results from the simpler OLS estimation method (without a dynamic setting) with and without individual fixed effects.

  9. Note that based on our bias correlation matrix and our theoretical considerations, selection of pursuing a major in business or economics should be positively correlated with both Business/Economics and Political Ideology. Thus, if anything, the bias should be upward.

  10. We use column 2 for inference because it covers the middle ground in terms of observations’ availability between column 1 and column 3.

  11. We calculate this finding by taking the first derivative of the regression and solving with respect to age—for example, 0.062/(2 × 0.001).

  12. Note that the number of observations is lower as we move from the first three columns to columns (4)–(6), owing to observations that uniquely identify individuals dropping out from the sample.

  13. The nonlinear effects could originate in the fact that business students initially adopt conservative views (as they learn conservative principles), but subsequently move away from these views as they realize the importance of other (left-wing) views.

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Acknowledgements

We are indebted to the editor and the two anonymous reviewers. Usual caveats apply.

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Authors and Affiliations

  1. Finance Group, Surrey Business School, and Centre for Money, Banking, and Institutions, University of Surrey, Guildford, GU2 7XH, UK

    Manthos D. Delis

  2. Fordham University, 45 Columbus Avenue, 5th Floor, New York, NY, 10023, USA

    Iftekhar Hasan

  3. Bank of Finland, Helsinki, Finland

    Iftekhar Hasan

  4. University of Sydney, Sydney, Australia

    Iftekhar Hasan

  5. Surrey Business School, University of Surrey, Guildford, GU2 7XH, UK

    Maria Iosifidi

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  1. Manthos D. Delis
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Correspondence to Iftekhar Hasan.

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Delis, M.D., Hasan, I. & Iosifidi, M. On the Effect of Business and Economic University Education on Political Ideology: An Empirical Note. J Bus Ethics 155, 809–822 (2019). https://doi.org/10.1007/s10551-017-3483-9

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