“Money’s getting shallow and weak,” wrote Bob Dylan in 2006, voicing people’s fears about losing jobs and making ends meet. Well it seems that Yale political science professor Jacob S. Hacker is trying to empirically measure these fears, which he labels “economic insecurity.” Economic insecurity is a feeling (“I feel insecure”) and a potential circumstance (“I have a real chance of experiencing economic losses for which I lack adequate protection”), Hacker explained.
Consequently, he uses opinion polls and economic data to gauge people’s insecurity and found that the “prevalence of insecurity has increased over the last generation and that this insecurity is associated with strong psychological responses to and substantial economic hardships.” Hacker Economic Insecurity Index melds income loss, out-of-pocket medical spending, and households’ financial safety net.
The index shows that economic insecurity gradually, but persistently rose from 1985 to 2007 across the economy’s ups and downs. According to Hacker, “In 1985, 12 percent of Americans were defined as insecure by the ESI. In 2010, the share was projected to hit 20.4 percent. The long-term trend has been upward. Unsurprisingly, economic security erodes during downturns, but between downturns, it does not bounce back.”
Hacker’s ESI is a first step toward measuring what Hacker sees as a “dominant motif in Americans’ economic lives. “There is still a pressing need for more research on the causes, consequences, and differential impact of economic insecurity and its effects on an increasingly broad swath of the U.S. population.”
