A recent study by Columbia Business School explored the impact of economic conditions on the work priorities of individuals, offering insight about the possible long term impact of the COVID-19 pandemic. The study indicated that boom or bust economies during childhood years shape how an individual will approach work in terms of professional motivation and job preference when they become adults.
The two most notable insights from the study were that youth who experienced recessions placed higher priority on income for the rest of their careers, while those in booms care about job meaning and fulfillment. The study strongly suggests that COVID-19 will have a significant impact on our country long after the current struggle has ended.
In the study titled Macroeconomic Conditions When Young Shape Job Preferences for Life, it is suggested that macroeconomic shocks – such as the IT boom, the Great Recession or the COVID-19 pandemic are temporary economic conditions that create shared experiences among generations. They feel this offers a better understanding of persistent generational differences— as opposed to hard-to-explain, deeply ingrained personality factors.
The researchers examined variation in income-per-capita across US regions and over time since the 1920s. They then constructed a measure of macroeconomic conditions during individuals’ impressionable years using data from the General Social Survey and the US Bureau of Economic Analysis.
“Having a career mindset of ‘working hard for the money’ versus ‘leading a purpose driven life’ could be the difference of you growing up in the boom years of the late 1990s or the economic downturn that followed after 9/11 and into the financial crisis. And now we can add coming of age or entering the workforce amidst the COVID-19 pandemic to that list,” said Columbia Business School Professor Stephan Meier.
The authors also propose that generational groups such as Millennials, Gen X, and Baby Boomers be segmented, evaluating each more narrowly and in shorter time periods. By doing this in terms of shared macroeconomic conditions among group members in a particular period more insight may be yielded.
In broader terms not taking heed of intra-generational differences in member preferences for work may have consequences for the organization and efficiency of labor markets. In terms of business cycle dynamics, it was concluded that economic booms influence workers to care more about meaning and less about income, in aggregate potentially resulting in slower economic growth.
“It is important for industry leaders and managers to better understand and appreciate how these differences are shaped to inform organizational, personnel, and recruitment decisions,” said Meier.
The study was co-authored by Stephan Meier, the James P. Gorman Professor of Business at Columbia Business School, Maria Cotofan and Robert Dur of Erasmus University Rotterdam, and Lea Cassar of the University of Regensburg.
