The Silver Lining of the Great Recession

February 24, 2015 by Emily Stagnaro | Comments Off

As I entered the job market in the midst of the worst recession since the Great Depression, no one (myself included) expected me to find a job quickly. After being raised in a generation that was told we could become anything we dreamed of, how would this rough start impact me? Research has shown that the state of the economy when entering adulthood can have lasting effects on our well-being, how satisfied we are with our lives, how much trust we have in government, and the belief that we are in control of our own economic success. In my first year out of college, as I prepared yet another caramel frappuccino alongside other newly minted graduates, I was comforted by the feeling that we were all in this together. As our lab explores the potential for growth resulting from adversity, it is encouraging to see research findings that point to a silver lining from beginning one’s career and growing up in the midst of a recession.

Emily Bianchi’s research shows lower rates of self-reported narcissism later in life to be a positive effect of entering adulthood during tough economic times. These findings were further supported by behavioral data showing that CEOs who emerged into adulthood when unemployment was high, paid themselves less than other CEOs when compared to the next most highly paid executive in their company. It may be that CEOs who pay themselves more similarly to other executives do so because they feel differently about their jobs. Earlier research by Bianchi has also shown that entering the job market in the midst of an economic downturn is correlated with greater job satisfaction. Looking at a national survey with a sample consisting of college graduates from the year 1975 – 2007, this rosier outlook was found to endure for years in those who graduated from college when unemployment was high.

Beyond professional adults, changes in the economy seem to have an impact on students as well. Following the onset of the 2008 recession, research by Heejung Park, Jean Twenge, and Patricia Greenfield found that adolescents’ collectivist values increased when compared to pre-recession measures in concern for others and for the environment. This shift in values was consistently found following economic downturns from 1976 onward.

This research supports a theory proposed by Patricia Greenfield which is meant to explain how sociodemographic changes impact cultural values, and ultimately alter development. One change Greenfield mentions that has an impact on relevant cultural values, is the shift from a more simple economy, providing income for basic necessities, to a larger and more complex economy, which adds a focus on the accumulation of goods. She proposes that these economic changes will cause a shift in where cultural values fall on the individualistic-collectivistic continuum. As an area becomes more industrialized, she would expect it to also become more individualistic. During a recession, her theory predicts the opposite, and we would expect for values to shift toward a lower self-focus, placing higher value on the community. While individual experiences are undeniably influential during development, the economic climate in which we mature clearly impacts the way that we view the world. Negative shifts is the macroeconomy are beyond our control, but the collective challenge they present are not exclusively detrimental.

 

 

References

Bianchi, E. C. (2013). The bright side of bad times: The affective advantages of entering the workforce in a recession. Administrative Science Quarterly,58(4), 587–623.

Bianchi, E. C. (2014). Entering Adulthood in a Recession Tempers Later Narcissism. Psychological Science,25(7), 1429–1437.

Giuliano, P., & Spilimbergo, A. (2009). Growing up in a Recession: Beliefs and the Macroeconomy (No. w15321). National Bureau of Economic Research.

Greenfield, P. M. (2009). Linking social change and developmental change: Shifting pathways of human development. Developmental Psychology,45(2), 401–418.

Park, H., Twenge, J. M., & Greenfield, P. M. (2014). The Great Recession Implications for Adolescent Values and Behavior. Social Psychological and Personality Science,5(3), 310–318.

Sutin, A. R., Terracciano, A., Milaneschi, Y., An, Y., Ferrucci, L., & Zonderman, A. B. (2013). The effect of birth cohort on well-being: The legacy of economic hard times. Psychological Science, 24(3), 379–385.