The Congressional Institute (a US Republican think tank) has a 2015 report stating that:
Millennials were highly protected in childhood by a fortress of youth safety initiatives, which they took as evidence that they were truly valuable. This protection has translated into risk aversion in their young-adult lives: Millennials are avoiding the stock market and real estate, turning away from entrepreneurship, and are trying to plan for the long term.
The above is mostly an indirect inference, which may well confuse cause and effect. The recession may have caused some of the observed effect via lack of money. But it's also possible that a combination of developmental and later environmental condition have truly affected the psychological inclination toward risk taking of the generation graduating in the midst of the recession. After all, people do suffer negativity bias.
I did find something else (and from a less political source) that might support the inference as well, namely two surveys found that millennials are apparently less likely to switch jobs than Gen-Xers. (Generally, more risk-averse persons switch jobs less often.)
British think tank the Resolution Foundation reported in February that only one in 25 UK millennials was switching jobs each year during their mid-twenties. Members of the preceding generation, known as Generation X, were found to be twice as likely to keep switching employers at the same age – a good thing for them, financially speaking. Job-hopping tends to come with a pay rise of about 15% with each move, as well as the opportunity for workers to learn new skills and determine which kind employers are a good fit for them. Meanwhile, pay rises for those who stay with one company for the long term have dwindled to almost nothing, according to the Resolution Foundation report.
In April, the Pew Research Center, a non-partisan “fact tank” based in Washington, DC, published similar findings, drawn from US Department of Labor data. The report found that American workers aged 18 to 35 were just as likely to stick with their employers as their older counterparts in Generation X were when they were young adults. And among those with college degrees, millennials were found to have longer track records with their employers than Generation X workers did when they were the same age.
But millennials may have done that because fewer jobs were available.
“The economic evidence is pretty clear,” says Laura Gardiner, senior policy analyst at the Resolution Foundation and one of the authors of the report on UK millennials’ decreasing job mobility. “Young people have always changed jobs more than older people, but it’s definitely the case that the rate of mobility has fallen – for young people particularly quickly, although it’s fallen for everyone.” [...]
Neither report gives concrete answers about why job mobility has decreased among young people. Richard Fry, a senior researcher at Pew, wrote in his summary of the data on Pew’s Fact Tank blog, that it may be “due to a dearth of opportunities to get a better job with a different employer.” Gardiner, meanwhile, points out that young people may be less willing to take risks having come of age during the financial crisis.
So, my question is whether are any systematic studies that more directly (e.g. via questionnaires or lab-based experiments) try to assess whether millenials have higher risk aversion than previous generations had at a corresponding age.
There's also an interesting side question here, which does however have an answer. Namely whether (self-reported) risk-aversion is time-varying (and how much). One study says
the question could be asked as to whether the financial and macro shocks a person faces over his lifetime modify his risk aversion. Our empirical analysis provides evidence that risk aversion is composed of a time-variant part and shows that the variation cannot be ascribed to measurement error or noise given that it is related to income shocks. Taking into account the fact that there are time-variant factors in risk aversion, we investigate how often it is preferable to collect the risk aversion measure in long panel surveys. Our result suggests that the best predictor of current behavior is the average of risk aversion, where risk aversion is collected every two years.
Given that it has been more than that since the start of the last recession, I guess the average risk aversion of millennials could be well estimated.