U.S. Markets closed

The hidden benefit of growing up in a recession

The hidden benefit of growing up in a recession

Millennials get a pretty bad rap. We’re entitled, self-obsessed brats who won too many awards for showing up in school and grew up believing we were, indeed, the special snowflakes our helicopter parents always told us we were

An oft-cited 2010 study published in Psychology Today seemed to cement our reputation as egomaniacs. Researchers found that 70% of college students were more narcissistic and less empathetic than the average student 30 years prior. The report, co-authored by San Diego State University researcher Jean Twenge, served as the basis of her controversial book “Generation Me: Why Today's Young Americans Are More Confident, Assertive, Entitled — and More Miserable Than Ever Before.”

But Twenge’s study focused on the 27-year period between 1982 and 2009 —  notably cutting off just as the college class of 2009 happened to be entering one of the worst job markets in history.

In a new study published in Psychological Science, Emily Bianchi, an assistant professor at Emory University’s business school, found that these recession-era graduates are actually better off in some ways than their peers, despite coming of age in a gloomy economy.

Bianchi argues that millennials who graduated during the recession are actually less narcissistic than those who grew up during boom times. Recessions, she says, actually have a way of moderating the growth of narcissism over time.

“Recessions can be humbling and can maybe temper people’s expectations of what they deserve and what they can expect,” Bianchi told Yahoo Finance. “I’m not trying to say the recession was a good thing. I’m just saying there may be some silver linings.”

To see what impact the economy could have on young adults’ levels of narcissism, Bianchi gave more than 1,500 adults born between 1947 and 1994 a survey to test their tendency toward narcissism — the same 40-question Narcissism Personality Inventory quiz that researchers have been using in narcissism studies since the 1970s. Clinical narcissism is defined as someone who lacks empathy for others, needs admiration from others, and is considered to be cocky, self-centered, manipulative and demanding.

Bianchi looked at the connection between the participants’ levels of narcissism and the rates of unemployment during the formative years of young adulthood (ages 18-25). Since younger people who just beginning their careers are disproportionately impacted by economic downturns, it made sense to study that age range.

Bianchi found that people who entered adulthood during the worst economic climate (7.7% unemployment) scored on average 2.4 points lower on the 0-40 narcissism scale than those who came of age during the best economic climate (4.3% unemployment).

Digging deeper, Bianchi backtracked to see if a similar trend emerged in earlier reports of narcissism. A  2007 study of more than 2,000 CEOs at publicly traded U.S. companies linked narcissism and higher executive pay. The more narcissistic a CEO was, the wider the gap was between his or her total compensation and that of the next highest-paid worker in their company. (Her argument for highlighting this pay gap is that CEOs have a direct influence over the pay of their subordinates. Therefore, the higher they think of themselves and their unique contribution to their company, the wider they prefer that gap to be.)

When Bianchi broke down the CEOs by age, she found a much smaller compensation difference in those who came into adulthood during economic downturns. They paid themselves 1.7 times as much as the next highest-paid worker, compared to CEOs who came of age in more robust economies, who paid themselves 2.3 times as much. A similar trend emerged when she looked at age and economy correlations in a nationwide study of 30,000 respondents from 2004.

One of the keys to her study was the age range — 18 to 25. Many researchers believe this is the time period when most young adults form much of their views about life. Past the age of 26, Bianchi found the economy, whether good or bad, had little effect on levels of narcissist.

“I’m very interested in this stage of life,” she says. “It seems so influential in terms of how most people think about themselves and their attitude.”

And while many like to blame the rise in narcissism on helicopter parenting and the selfie-obsessed world of virtual interaction that permeates youth culture, Bianchi’s findings show that the way young people see themselves is partly a product of the health of the economy as a whole.

In another study released earlier this year, Bianchi found that recession graduates benefited from an extra dose of satisfaction because they managed to land a job during hard times.  That knowledge, the study found, acted like something of a talisman for them for years to come, protecting them from disappointment even if they wound up in lower-paying careers. Bianchi found the same effect occurred even after controlling for income, industry, occupation, age, gender and work experience.

“We know a lot about the consequences of being narcissistic, but we know much less about why some people become narcissistic,” Bianchi said. [The economy] seems to have a very lasting imprint in a way that I think is very interesting and important.”

Follow Mandi on Twitter!


The $10,000 degree that has everyone talking

Ex-stock broker travels the world on $10 a day

Todays' 20-somethings might need $7 million for retirement