A devastating analysis reveals that COVID lockdowns created a generation of young Americans with record-high neuroticism and plummeting openness—psychological damage that now threatens America’s economic future and investment markets.
Lockdown Legacy Creates Psychological Crisis
The Financial Times analysis exposes the catastrophic psychological toll of COVID lockdowns on America’s youth. Research spanning multiple datasets reveals that young people now display unprecedented levels of neuroticism—characterized by anxiety, emotional instability, and pessimism—while showing dramatically reduced openness to new experiences. This represents a fundamental shift in personality profiles that directly contradicts the psychological traits necessary for economic dynamism and personal financial success.
The American Association of Individual Investors conducted extensive surveys beginning in 2019, providing baseline data that starkly contrasts with post-lockdown measurements. Academic researchers consistently document how these personality changes manifest in real-world financial decision-making, creating a generation paralyzed by risk aversion and economic pessimism. This psychological damage represents one of lockdowns’ most underreported yet potentially devastating consequences.
Economic Consequences Threaten Market Stability
Young investors’ newfound neuroticism translates directly into market-damaging behaviors that threaten America’s economic foundation. Studies demonstrate strong correlations between heightened neuroticism and reduced equity investment, as anxious individuals avoid stock markets in favor of conservative savings accounts. This risk aversion among an entire generation could significantly depress capital formation and slow economic recovery, undermining the entrepreneurial spirit that drives American prosperity.
Financial literacy researchers identify personality traits as key mediators in investment decisions, with neurotic individuals consistently making suboptimal financial choices regardless of their education level. The implications extend beyond personal wealth accumulation to broader economic dynamism, as reduced investment participation weakens market liquidity and limits companies’ access to capital. These trends represent a direct threat to America’s competitive advantage in global markets.
Innovation and Entrepreneurship Under Siege
The decline in openness—a personality trait essential for innovation and entrepreneurship—poses long-term risks to American leadership in technology and business development. Behavioral finance experts warn that low openness correlates with resistance to new investment opportunities, reluctance to start businesses, and general aversion to the calculated risks that drive economic progress. This psychological shift could undermine America’s historical advantage in fostering innovation and adapting to changing market conditions.
My latest for The Federalist:https://t.co/pGNzgyPUWH
— Disaffected (@DisaffectedPod) August 19, 2025
Mental health professionals observe that the combination of high neuroticism and low openness creates individuals prone to career indecision and social withdrawal—characteristics that historically precede economic stagnation. Policymakers now face the challenge of addressing psychological damage that traditional economic interventions cannot fix, requiring comprehensive approaches that address both mental health and financial education to restore confidence in American economic institutions.
Sources:
NBER Working Paper on Personality and Investment Behavior
Journal of Financial Economics: Personality Traits and Financial Decision-Making
Alpha Architect Analysis: American Association of Individual Investors Survey Data
Core Academic Research: Demographics and Investment Risk Preferences
National Center for Biotechnology Information: Personality Development and Career Decision-Making