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The Economic Security Index: a new measure for research and policy analysis

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  • Jacob S. Hacker
  • Gregory Huber
  • Austin Nichols
  • Philipp Rehm
  • Mark Schlesinger
  • Robert G. Valletta
  • Stuart Craig

Abstract

This paper presents the Economic Security Index (ESI), a new, more comprehensive measure of economic insecurity. By combining data from multiple surveys, we create an integrated measure of volatility in available household resources, accounting for fluctuations in income and out-of pocket medical expenses, as well as financial wealth sufficient to buffer against these shocks. We find that insecurity has risen steadily since the mid-1980s for virtually all subgroups of Americans, albeit with cyclical ups and downs. We also find, however, that there is substantial disparity in the degree to which different groups are exposed to economic risk. As the ESI derives from a data-independent conceptual foundation, it can be measured using different data sources. We find that the degree and disparity by which insecurity has risen is robust across these sources.

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Bibliographic Info

Paper provided by Federal Reserve Bank of San Francisco in its series Working Paper Series with number 2012-21.

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Date of creation: 2012
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Handle: RePEc:fip:fedfwp:2012-21

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Keywords: Households - Economic aspects;

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  1. Christopher D. Carroll & Karen E. Dynan & Spencer D. Krane, 2003. "Unemployment Risk and Precautionary Wealth: Evidence from Households' Balance Sheets," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 586-604, August.
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  9. Thomas Cusack & Torben Iversen & Philipp Rehm, 2006. "Risks at Work: The Demand and Supply Sides of Government Redistribution," Oxford Review of Economic Policy, Oxford University Press, vol. 22(3), pages 365-389, Autumn.
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  14. Nichols, Austin, 2008. "Trends in Income Inequality, Volatility, and Mobility Risk," IRISS Working Paper Series 2008-10, IRISS at CEPS/INSTEAD.
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Cited by:
  1. Smith, Trenton G. & Stillman, Steven & Craig, Stuart, 2013. "The U.S. Obesity Epidemic:New Evidence from the Economic Security Index," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151419, Agricultural and Applied Economics Association.

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