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Young adults' political, fiscal views change as a result of recession

Monday, January 18, 2010  
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By Sean F. Driscoll
GateHouse News Service
Posted Jan 18, 2010 @ 12:19 PM

When Francois O’Leary was a freshman at Rockford College, it didn’t take him long to realize that his path to employment would be different from what he thought.

It was the midst of the recession, the fall of 2008, and O’Leary found himself short on funding to pay his tuition, even with scholarships and financial aid. And his plans to get a bachelor’s degree in biochemistry and roll right into dental school suddenly had to change.

The situation hasn’t improved much. Now a sophomore, O’Leary still has plans for dental school — but he’s keeping a closer eye on his checkbook.

"Lots of students even now don’t have their books for the semester because they don’t have the finances,” he said. "Our parents don’t have the money, so we have to rely on the government and the school to get the funds we need. We’re the country’s future leaders — money shouldn’t be an issue. The government and the bureaucrats should find solutions for us.”

For young adults, living through a recession can have long-lasting effects on their views on the government’s role in society and how economies should work.

A recent National Bureau of Economic Research paper shows those who experience a recession during their impressionable years, or roughly ages 18 to 25, are more likely to believe that individual success is driven by luck, not hard work. They prefer more government redistribution of wealth, although they tend to distrust government.

New beliefs permanent
These beliefs will far outlast the recession in which they’re formed, said Paola Giuliano, a professor at the University of California-Los Angeles and co-author of the paper.

"We found that this effect is permanent,” she said. "Your beliefs are changed forever.”

The next phase of Giuliano’s work with her collaborator, International Monetary Fund economist Antonio Spilimbergo, will focus on how these beliefs affect voting patterns. Based on the survey data gathered so far, it’s not clear how this recession will cause the nation’s party politics or economics to swing.

But history suggests this generation’s beliefs will be dramatically different from their parents’.
"It’s a conflicting effect,” Giuliano said. "They would like more intervention, so they would like the government to do more to help the poor, but on the other hand they lose their confidence in the government. It’s not clear in terms of political behavior how this will turn out.”

Fred Rezazadeh, professor of economics and business at Rockford College, said the pessimism generated during a recession can change the way people think about and plan for the future — choices that can ripple across the economy.

"It’s not a very quantitative type of factor, but it does have a real impact on our economy,” he said. "During these periods we’re talking about, the recession is only one aspect of the major upheaval and changes that began with globalization and outsourcing.”

Teens affected, too
Although Giuliano and Spilimbergo’s paper showed those younger than 18 were too young to have their political and economic beliefs shifted by a recession, that doesn’t mean teens and younger children emerge from economic downturns unscathed.

Mary Ann Norwood, owner and director of Pathways Employee Assistance Program in Rockford, said the teenage children of adults she works with often have anxiety over their career futures in light of their parents’ economic struggles.

"I’ve heard kids wonder if they go to college, will they be able to get a job anyway,” she said. "I’ve heard kids wondering what kind of job they should get and what do they need to do to find that job. I see it more than I did before. There seems to be a lot of uncertainty about the cost of going to college and is it worth it.”

Learning to make adjustments
Norwood said the challenges to those families are considerable, but it often helps teens face some realities about their careers and planning for the future.

"I think it’s good that they realize the economic situation and make adjustments with their parents,” she said. "They can go to Rock Valley, Highland or Kishwaukee (colleges) and be fine. I think kids do about as well as the parents do. If the parents say ‘We’ll be all right, but we have to tighten our belts,’ that’s good. If they don’t share information and are withdrawn, then the kids don’t do well, either. The parents set the tone for it.”

Josh Papke, 25, started his master’s in business administration at Rockford College in 2008 with financial assistance from his employer. But his path today bears no resemblance to his original plan.
After earning his bachelor’s degree, he moved to Minnesota for a job but lost it. He moved back to Rockford, got another job, and was laid off again.

And he found himself in another unfamiliar situation: trying to find college funding while applying for unemployment and having major doubts about his employment future.

Taking control
"I would definitely say that prior to going through this firsthand, I didn’t really educate myself on what government’s role was or wasn’t on the economy,” he said. "Now that I’m a victim of it, for lack of a better word, I’m more aware of their involvement, and I’m really thankful for the unemployment benefits and other things I’ve been able to receive.”

Papke, who landed a graduate assistantship at Rockford College to help defray his expenses, will graduate in July. Even with the economic tumult, he still views his master’s in business administration as a necessary investment in his future.

"As cheesy as it sounds, I do maintain that hard work and perseverance is going to pay off,” he said.
 
"At the end of the day, I know that I did what I needed to do. I don’t want to rely on the slim possibility that I’m going to stumble on some great job. You never know what’s going to happen, but I feel a lot better that I did what I needed to do to give myself an advantage.”

Sean F. Driscoll can be reached at (815) 987-1346 or sdriscoll@rrstar.com.

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