Young adults in Massachusetts remain believers in the American Dream and continue to be optimistic about their economic futures - despite the mortgage crisis, recent downturns in the economy and a sagging faith in local and state governments.

A survey released by Bay State think tank MassINC revealed that most of the 25- to 39-year-olds surveyed anticipate increased income and home ownership opportunities, and expect their children to do better economically than their parents. In addition, a high proportion expressed relative satisfaction with their jobs and look increasingly to the private sector rather than government to solve environmental and social problems.

"We were struck by the degree to which young people are optimistic about the quality of life, their future and the American dream in general, which appears to be alive and well in this generation," said Greg Torres, president of MassINC of the survey conducted by Princeton Survey Research Associates International.

The survey data was collected in February, before gasoline prices began to skyrocket, and before recent hikes in jobless statistics, the banking crisis and the latest round of increases in real estate foreclosures. The study focused on the generation of Bay State residents entering their prime earning and family-building years, whose decisions to remain in Massachusetts may well depend on cost of living and employment issues.

Most tended to be optimistic. For instance, 80 percent of 25-39-year-olds think their household income will be higher in five years. Only 11 percent thought their income would stagnate or decline. Three of four respondents expect to own a home within the next three years. Looking to the future, 57 percent of respondents said they think their children will be better off than their parents. However, while young people tended to have optimistic outlooks, one in five in the survey said they were considering leaving the state. Respondents who were inclined to consider leaving tended to be those who were struggling economically or those whose personal plans, such as marriage, impacted their decision. The cost of living was cited most often as the reason for wanting to leave, followed by the weather, family or romantic relationships and job opportunities.

Those who perceived problems in the state said they were less than confident in the government's ability to cope. Only 4 percent of young adults said they were very confiedent that state and local government can improve the policy they felt should be top priority, ranging from health care to high taxes and affordable housing. About 57 percent said they feel taxes are too high.

Young people were much more charitable to the private sect. Overall, 87 percent of the employed reported that they are satisfied with their jobs. And nearly three quarters said they believe it is important to work for an employer who is socially responsible. An overwhelming 89 percent ranked their current employers as either very or somewhat socially responsible.

Among other key findings:

Nearly all young adults surveyed (92 percent) have health insurance including 7 percent who said they obtained it through the state's subsidized insurance plan.

Finances are rated the biggest problem facing young adults and their families with 30 percent saying paying bills, not having enough money and making ends meet is their biggest problem.

When asked what steps state and local government could take to make them more likely to remain in the Bay State, the most common answers were reducing taxes, making housing more affordable and improving job opportunities.

RICK FOSTER can be reached at 508-236-0360 or at rfoster@thesunchronicle.com.