Economic Insecurity: Editors' Introduction

Abstract

This supplement issue focusing on Economic Insecurity combines papers emphasizing measurement of trends and cross-national comparisons of economic insecurity with papers discussing its policy determinants and social implications. In general, economic insecurity is about the looming economic dangers that affect people's lives in many spheres, from the fear of losing one's job to the anxiety of not being able to make ends meet. As Stiglitz et al. (2009) have argued, measuring economic insecurity is fundamental to understanding people's economic wellbeing and to giving economic policy a wider perspective than that provided by static measures of poverty and material deprivation. Measuring it in the right way helps us not only to understand how people are objectively exposed to the risk of poverty and material hardship, but also to understand how their behaviors and feelings are possibly affected by such risks and the dynamics of poverty and material deprivation. As such, it provides an important tool to policy makers to better assess the causal pathways into and out from poverty and deprivation and to better identify the policy actions needed.In recognition of the importance of this topic, the Organization for Economic Cooperation and Development and the International Association of Income and Wealth organized a conference on its measurement, causes, and policy implications. Presenters were invited to submit papers to the Review, and this Supplement Issue contains those that were accepted after the peer review process.The hazards of economic life differ depending on the age, gender, and socioeconomic background of individuals, and depending also on the institutional features, generosity, and effectiveness of national welfare systems; hence economic insecurity also differs along these dimensions-and for many people, the spill-over impacts on well-being include health, social networks, and subjective well-being. This variety of impacts implies that there is as yet no unique agreed framework for defining and measuring economic insecurity. However, underpinning most existing approaches is the idea of uncertainty about future economic losses and the extent to which this uncertainty harms people's well-being. Stiglitz et al. (2009)

Measuring Economic Insecurity Using a Counting Approach. An Application to Three EU Countries

“…Moreover, labor market and fertility decisions may be affected by insecurity and may impact current and future physical and mental health (Smith et al , ; Barnes and Smith, ; Modena et al , ; Rohde et al , , ; Staudigel, ; Watson, ). Therefore, insecurity should be included in any analysis of well‐being, as current and future inequality could be affected by the dynamics of individual behavior (Boarini and Osberg, ).…”

From a System of National Accounts to a Process of National Wellbeing Accounting

“…As an example, Hacker et al () have proposed an ‘Economic Security Index’, designed to ‘fill a gap in existing theoretical and empirical analyses’ for research and policy analysis, but also conclude that ‘Ultimately, no single measure can capture all aspects of economic security’, which Stiglitz et al. saw as ‘fundamental to understanding people's economic wellbeing and to giving economic policy a wider perspective than that provided by static measures of poverty and material deprivation' (Boarini and Osberg, , p S1).…”

The Contribution of Income Mobility to Economic Insecurity in the US and Spain during the Great Recession

“…The former group of measures have long been linked to the idea of intra or intergenerational transmission of opportunities, while the latter are more clearly identified in the literature as proxies for economic insecurity. Boarini and Osberg (2014) point out that "economic insecurity is about the looming economic dangers that affect people's lives in many spheres, from the fear of losing's one's job to the anxiety of not being able to make ends meet" (p. S1). In sum, insecurity reflects the individual uncertainty about future economic losses guided by either observing what is happening to others or by the actual occurrence of an adverse event within one's household (job losses, death of main breadwinner, salary cuts, etc.).…”

“…Since Stiglitz, Sen, and Fitoussi (2009), it has become clear that measuring economic insecurity is a key issue to understand individual well-being. Most recently, Boarini and Osberg (2014) underline that approaching the idea of uncertainty about economic losses and the extent to which this impacts well-being are main aims for research, more so when economic shocks are severe, have a long duration and include relevant losses for a wide range of individuals in society. A large number of works have demonstrated that income instability and perceived insecurity have an impact on well-being (Hacker et al, 2014), and a consideration of the prevalence of losses is particularly relevant (Ja¨ntti, Kanbur, Nyyssola¨, & Pirttila, 2013).…”