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Perceptions of Economic Insecurity: Evidence from the Survey of Economic Expectations

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Author Info
Jeff Dominitz
Charles F. Manski

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Abstract

We have recently initiated the Survey of Economic Expectations (SEE) to learn how Americans perceive their near-term futures. This paper uses SEE data on over two thousand labor force participants interviewed in 1994 and 1995 to describe how Americans in the labor force perceive the risk of near-term economic misfortune. We measure economic insecurity through responses to questions eliciting subjective probabilities of three events in the year ahead: absence of health insurance, victimization by burglary, and job loss. With item response rates exceeding 98 percent, respondents clearly are willing to answer the expectations questions and they appear to do so in a meaningful way. Using the responses to classify individuals as relatively secure, relatively insecure, and highly insecure, we find that respondents with a high risk of one adverse outcome tend also to perceive high risks of the other outcomes. Economic insecurity tends to decline with age and with schooling. Black respondents perceive much greater insecurity than do whites, especially among males. Within the period 1994-1995, we find some time-series variation in insecurity but no clear trends. We find that expectations and realizations of health insurance coverage and of jobs tend to match up quite closely, but respondents substantially overpredict the risk of burglary.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5690.

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Date of creation: Jul 1996
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Handle: RePEc:nbr:nberwo:5690

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Charles F. Manski, 1993. "Adolescent Econometricians: How Do Youth Infer the Returns to Schooling?," NBER Chapters, in: Studies of Supply and Demand in Higher Education, pages 43-60 National Bureau of Economic Research, Inc. [Downloadable!]
  2. Fischhoff, Baruch, 1994. "What forecasts (seem to) mean," International Journal of Forecasting, Elsevier, vol. 10(3), pages 387-403, November. [Downloadable!] (restricted)
  3. Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1992. "Earnings uncertainty and precautionary saving," Journal of Monetary Economics, Elsevier, vol. 30(2), pages 307-337, November. [Downloadable!] (restricted)
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  4. Jeff Dominitz, 1998. "Earnings Expectations, Revisions, And Realizations," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 374-388, August. [Downloadable!] (restricted)
  5. J. Dominitz & C. F. Manski, . "Eliciting student expectations of the returns to schooling," Institute for Research on Poverty Discussion Papers 1049-94, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
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  6. J. Dominitz & C. F. Manski, . "Using expectations data to study subjective income expectations," Institute for Research on Poverty Discussion Papers 1050-94, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
    Other versions:
  7. James Tobin, 1957. "On the Predictive Value of Consumer Intentions and Attitudes," Cowles Foundation Discussion Papers 41, Cowles Foundation, Yale University. [Downloadable!]
  8. repec:att:wimass:19895 is not listed on IDEAS
  9. Camerer, Colin & Weber, Martin, 1992. " Recent Developments in Modeling Preferences: Uncertainty and Ambiguity," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 325-70, October.
  10. repec:att:wimass:199110 is not listed on IDEAS
  11. Adrian W. Throop, 1992. "Consumer sentiment: its causes and effects," Economic Review, Federal Reserve Bank of San Francisco, pages 35-59. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Charles F. Manski, 2004. "Interpreting the Predictions of Prediction Markets," NBER Working Papers 10359, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Clark, Andrew E & Postel-Vinay, Fabien, 2005. "Job Security and Job Protection," CEPR Discussion Papers 4927, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. Mendez, Ildefonso, 2008. "The Role of Partnership Status and Expectations on the Emancipation Behaviour of Spanish Graduates," MPRA Paper 8655, University Library of Munich, Germany. [Downloadable!]
  4. Böckerman, Petri, 2002. "Perception of job instability in Europe," MPRA Paper 4701, University Library of Munich, Germany. [Downloadable!]
  5. Richard G. Anderson & Charles S. Gascon, 2008. "Offshoring, economic insecurity, and the demand for social insurance," Working Papers 2008-003, Federal Reserve Bank of St. Louis. [Downloadable!]
  6. Jeff Dominitz & Charles F. Manski & Jordan Heinz, 2003. ""Will Social Security Be There For You?": How Americans Perceive Their Benefits," NBER Working Papers 9798, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Sascha O. Becker & Samuel Bentolila & Ana Fernandes & Andrea Ichino, 2005. "Youth Emancipation and Perceived Job Insecurity of Parents and Children," IZA Discussion Papers 1836, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  8. Pesaran, M.H. & Weale, M., 2005. "Survey Expectations," Cambridge Working Papers in Economics 0536, Faculty of Economics, University of Cambridge. [Downloadable!]
    Other versions:
  9. Luca Casolaro & Leonardo Gambacorta & Luigi Guiso, 2005. "Regulation, formal and informal enforcement and the development of the household loan market. Lessons from Italy," Temi di discussione (Economic working papers) 560, Bank of Italy, Economic Research Department. [Downloadable!]
  10. Ahmed Khwaja & Frank Sloan & Sukyung Chung, 2007. "The relationship between individual expectations and behaviors: Mortality expectations and smoking decisions," Journal of Risk and Uncertainty, Springer, vol. 35(2), pages 179-201, October. [Downloadable!] (restricted)
  11. Jeff Dominitz & Charles F. Manski & Jordan Heinz, 2002. "Social Security Expectations and Retirement Savings Decisions," NBER Working Papers 8718, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Jeff Dominitz & Charles F. Manski, 2005. "Measuring and Interpreting Expectations of Equity Returns," NBER Working Papers 11313, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  13. Maria Ward Otoo, 1997. "The sources of worker anxiety: evidence from the Michigan survey," Finance and Economics Discussion Series 1997-48, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  14. Delavande, Adeline, 2005. "Pill, Patch or Shot? Subjective Expectations and Birth Control Choice," CEPR Discussion Papers 4856, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  15. Federica Origo & Laura Pagani, 2008. "Flexicurity and Workers Well-Being in Europe: Is Temporary Employment Always Bad?," Working Papers 141, University of Milano-Bicocca, Department of Economics, revised Jun 2008. [Downloadable!]
  16. Martha Starr-McCluer, 1998. "Stock market wealth and consumer spending," Finance and Economics Discussion Series 1998-20, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
    Other versions:
  17. Jeff Dominitz & Charles F. Manski, 2003. "How Should We Measure Consumer Confidence (Sentiment)? Evidence from the Michigan Survey of Consumers," NBER Working Papers 9926, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  18. Ari Hyytinen & Mika Pajarinen, 2005. "Why Are All New Entrepreneurs Better Than Average? Evidence from Subjective Failure Rate Expectations," Discussion Papers 987, The Research Institute of the Finnish Economy. [Downloadable!]
  19. Luigi Guiso & Tullio Jappelli & Luigi Pistaferri, 1998. "What Determines Earnings and Employment Risk?," CSEF Working Papers 08, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
    Other versions:
  20. Wilbert van der Klaauw & Wändi Bruine de Bruin & Giorgio Topa & Simon Potter & Michael Bryan, 2008. "Rethinking the measurement of household inflation expectations: preliminary findings," Staff Reports 359, Federal Reserve Bank of New York. [Downloadable!]
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