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When your finances are shaky, you may have to worry about more than your bank account: your morals might also be headed downhill. A new study finds that when people feel financially deprived, they may bend the rules of their moral code.

Main Street and the government are still reeling from Wall Street's ethical fumbles in the lead-up to the 2008 banking meltdown. All is not forgiven: JPMorgan will be fined $13-billion (U.S.) – the largest settlement ever paid to the federal government – and was required to publicly admit to "wrongdoing."

Greed may have fuelled the bankers' alleged bad behaviour, but evidence suggests fear is also a powerful driver. Financial insecurity makes people more lax with their moral decisions, says a study conducted by a team of researchers including Duke University's Dan Ariely, the University of Toronto's Nina Mazar and NYU's Adam Alter.

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Before the experiments began, research participants predicted that financial deprivation would not lead them to behave immorally, and firmly believed that "deprivation should not pardon immoral behaviour."

However, in a series of five experiments in which participants were induced to feel financially worse off, either by real monetary loss or in comparison to others, those that were "financially deprived" demonstrated a much higher rate of cheating and dishonesty.

At the start of the experiment, 89 student participants pulled a computer slot machine. The "deprived" group lost $10, while the "non-deprived" group gained $10.

Students then played 400 rounds of a computer game in which dots appeared on a screen, and they had to identify whether there were more dots on the left or right side of the screen. They earned half a cent for identifying more dots on the left, and 5 cents for more dots on the right.

Researchers told the students to be accurate because their results would be used to design future studies, but the computer would pay them based on their response. So participants could either lie to make more cash, or tell the truth.

The results showed that the "deprived" group had a significantly higher rate of dishonesty in each experiment.

The implications for policy are tangible. With the seeds of recovery sprouting after years of economic ruin, these results beg the question: has the recession made us less moral?

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The study concludes that, as a result of financial deprivation, "people might engage in workplace sabotage, pilfering, and other dishonest conduct." They argue that policies that deepen inequality, such as flat tax rates, will encourage bad behaviour that can be damaging to businesses.

The study also found that people under financial stress would be more accepting of others' unethical behaviour if they feel the offender is in financial trouble. As governments push through sweeping reforms to unemployment benefits and stimulus spending programs, the authors warn that policy makers should be mindful of this "deprivation effect."

"Those in the position to make powerful decisions might be swayed by their sense of financial comfort (and the financial comfort of those affected) – and they are strikingly unaware of it," Mr. Alter said. For example, someone who has just lost a sum of money might subconsciously be less inclined to report a theft by a similarly impoverished person. Policy makers, who are themselves affluent, may not be aware of such considerations.

The study is far from conclusive; it admits that the financial deprivation it tested for was temporary and immediate, and therefore the results cannot generalize about chronic states of deprivation. In other words, there are no implications for whether poor people or rich people are more likely to be ethical.

For now, hold onto your staplers and Post-it notes.

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