NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

Jeff Dominitz, Charles F. Manski

NBER Working Paper No. 5690
Issued in July 1996
NBER Program(s):   LS

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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Document Object Identifier (DOI): 10.3386/w5690

Published: Dominitz, Jeff and Charles F. Manski. "Perceptions of Economic Insecurity: Evidence From the Survey of Economic Expectations." The Public Opinion Quarterly 61, 2 (Summer 1997): 261-287.

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