After the global financial crisis, students were devastated. Many wallowed in unemployed misery, bemoaning that there just weren’t enough jobs to go around. Those who landed jobs felt that they were settling for less, accepting positions they didn’t want at employers that weren’t a great fit.
This wasn’t just a short-term problem: research suggests that when people start their careers in an economic downturn, they earn less money over the next two decades—and despite earning more advanced degrees while the economy is bad, they end up in less prestigious jobs. As Yale economist Lisa Kahn writes, “the labor market consequences of graduating from college in a bad economy are large, negative and persistent.”
Despite these disadvantages, a talented researcher named Emily Bianchi had a hunch that there might be a bright side of bad times. She analyzed data from two major US government surveys of thousands of college graduates over four decades, looking at how their job satisfaction was affected by the economic conditions when they first started their careers. In both surveys, people who graduated during economic recessions were more satisfied with their jobs than people who graduated in better economic circumstances. This was true even after controlling for their income, as well as their industry, occupation, age, gender, and work experience.
Launching your career when jobs are scarce actually predicts being more satisfied. “What surprised me most about these findings was how long these effects endured,” Bianchi reflects. “Recession graduates were typically happier with their jobs even decades after receiving their diplomas—and even after markets stabilized, recessions slowed, and hiring ramped up.”
Why would this be? For years, psychologists have demonstrated that our happiness depends on the comparisons that we make. Consider these data points:
- In the job search, college seniors who aim for the best earn 20% higher salaries, yet are less satisfied with the jobs they take.
- At the bargaining table, negotiators who aim high get better deals but feel less satisfied.
- In the Olympics, trained raters watched videos of medalists at the end of their events and on the medal stands. When the raters coded Olympians’ facial expressions on a scale from agony to ecstasy, ironically, the bronze medalists were happier than the silver medalists.
In each case, psychologist Barry Schwartz points out in The Paradox of Choice that people are doing better but feeling worse. When you’re looking for the perfect job, it’s easier to end up with disappointments and regrets than if you’re just searching for a job that’s good enough. When you set a goal for a major victory in a negotiation, the odds are greater that what you get will fall short of your expectations, even if you do better than you otherwise would have. When you win an Olympic bronze medal, you compare yourself to the athletes who aren’t on the medal stand, and you feel lucky that you got a medal. But when you win the silver, you can’t help but ruminate about what might have been.
“I would rather come in last than win the silver,” says Jerry Seinfeld. “You win the silver, that’s like, ‘Congratulations, you almost won. Of all the losers, you came in first among that group. You’re the number one loser. No one lost ahead of you.’”
Our expectations matter. We now have decades of evidence that when people start their jobs with a rosy view, they’re more likely to be dissatisfied and unproductive, and more inclined to quit. There’s a gap between high expectations and the mixed reality of most jobs—and those with high hopes also wind up frustrated that their employers weren’t entirely honest with them. When people enter a job with a realistic preview, they turn out to be happier, more productive, and more likely to stay.
Similar benefits emerge when people start their careers in a recession. Bianchi finds that when people graduate during tough economic conditions, they’re less likely to entertain “thoughts about how they might have done better” and “more likely to feel grateful for their jobs.”
In a recent interview, I asked Malcolm Gladwell what motivated him to write David and Goliath. He observed that we make narrow “assumptions about what constitutes an advantage in any given situation,” and emphasized the value of recognizing that many apparent disadvantages have hidden advantages. When we assume that economic recessions are universally bad, we overlook the fact that they have the side effect of calibrating our expectations, giving the irrationally optimistic a dose of reality. According to Bianchi, one of the benefits of the economic recession may lie in tempering the so-called entitlement of the Millennial generation. When you know how hard it is to find a good job, it’s easier to appreciate the one you have.
Of course, it shouldn’t take a serious recession to remind us that we should be grateful for our good fortunes. But in a world where it’s all too easy to lose sight of what’s going right, there may be long-term gains from short-term losses.