2319678688_8a48633878Those of us of the “recession generation” will most likely remember college as a time of budget cuts, walkouts and copious amounts of Top Ramen. And chances are, we won’t be too hasty to invest in the stock market any time soon after graduation, at least according to a recent National Bureau of Economic Research paper.

Ulrike Malmendier of UC Berkeley and Stefan Nagel of Stanford looked at the investment propensity of “Depression babies” and found that they were more than a little hesitant to do their shopping at the stock market. As it turns out, the mental trauma of financial shocks are long-lasting, especially for those who endure them in their formative years (18-25).

According to their research:

… individuals growing up during recessions tend to believe that success in life depends more on luck than on effort, support more government redistribution, but are less confident in public institutions.

So long after the recession has receded, it’ll still leave a bad taste in your mouth (probably the stench of metal left from all that penny pinching).

Will Recession Forever Scar Young Investors? [Wall Street Journal]
Image Source: waɪ.tiː under Creative Commons



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