Recession may shape young adults’ views

After living through one of the most brutal recessions in U.S. history, many of today’s late teens and young adults could be scarred for life, adopting behaviors that could skew everything from their own careers to politics, corporate profits and the stock market.

Academics are beginning to study the implications of the recent recession on the current generation of Americans that age, suggesting it may have much the same effect as how the Great Depression changed so many of the youths of the 1930s into conservative spenders and investors.

Experts said people from 18 to 25 are the most likely to be affected for life as they internalize the struggles they’ve seen in family and friends and contemplate the power they will have over their own destiny.

Researchers Paola Giuliano of UCLA and Antonio Spilimbergo of the International Monetary Fund, in a National Bureau of Economic Research paper looking at recessions from 1963 to 2006, found that young people who live through recessions tend to doubt their control over their careers. Unlike people who have lived through sweeter economic circumstances, the youths of recessions tend to look at career success as luck rather than a result of personal action.

Long-term attitudes are soured most dramatically if individuals go through the stress of losing their own job, rather than simply taking in the broader angst amid a recession.

The current young generation has been hit hard directly and indirectly. In their homes, teens have likely seen parents worry about home values. In the workplace, there’s the threat to jobs as the unemployment rate remains stuck at 10 percent, one of the highest levels in three decades.

In addition, households are trying to replenish savings after a huge decline in the value of 401(k) plans, and impatient banks are forcing credit-card holders to pay off debt and are reluctant to provide high levels of new credit.

Beyond family pressures, unemployment among 16-to-19-year-olds is at an extraordinarily high level of more than 26 percent. Students finishing college face difficult job prospects, with hiring of this year’s graduates down 22 percent, according to the National Association of Colleges and Employers.

The political discontent that the researchers noted is showing up in a 25 percent approval rating for Congress and slippage in President Barack Obama’s numbers, according to Gallup polls.

The public’s demand for action is fueling debate on how much business regulation is needed to protect people and how much would stymie profits, the economy and stock market.

Fidelity Investments research shows that Americans ages 22 to 33 have shifted toward more conservative financial behavior. It’s influencing everything from investing to job choices: More are seeking job security and strong benefits.

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