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The Economic Security Index: A New Measure for Research and Policy Analysis

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Author Info

  • Hacker, Jacob S.

    ()
    (Yale University)

  • Huber, Gregory Alain

    ()
    (Yale University)

  • Nichols, Austin

    ()
    (Urban Institute)

  • Rehm, Philipp

    ()
    (Ohio State University)

  • Schlesinger, Mark

    ()
    (Yale University)

  • Valletta, Robert G.

    ()
    (Federal Reserve Bank of San Francisco)

  • Craig, Stuart

    (Yale University)

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6946.

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Length: 56 pages
Date of creation: Oct 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6946

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Keywords: household income; volatility; wealth; medical spending;

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References

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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., Agricultural and Applied Economics Association 151419, Agricultural and Applied Economics Association.

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