Correct Answers From 264 - 293:.A . A . D . C . A . C . D . C .A . E . A . D. B. B. C. A.A.A.D. D.B. C. C. E. B. A. B. B. D.

C insecurity - the state of being subject to danger or injury danger - the condition of being susceptible to harm or injury; "you are in no danger"; "there was widespread danger of disease" insecurity - the state of being subject to danger or injury danger - the condition of being susceptible to harm or injury; "you are in no danger"; "there was widespread danger of disease" insecureness - the state of being exposed to risk or anxiety security - the state of being free from danger or injury; "we support the armed services in the name of national security" 2.insecurity - the anxiety you experience when you feel vulnerable and insecure anxiety - a vague unpleasant emotion that is experienced in anticipation of some (usually illdefined) misfortune Economic security or financial security is the condition of having stable income or other resources to support a standard of living now and in the foreseeable future. It includes:

probable continued solvency predictability of the future cash flow of a person or other economic entity, such as a country employment security or job security

Financial security more often refers to individual and family money management and savings.[1][2] Economic security tends to include the broader effect of a society's production levels and monetary support for non-working citizens.

Threats to economic security

1. 2. 3. 4. 5.

Low earnings No earnings Significant decline in income Significant loss of assets Large unexpected cost

Why care?

1. Economic insecurity reduces living standards 2. Economic insecurity increases anxiety and stress 3. Economic insecurity reduces happiness

The argument: rising economic insecurity

1. The incidence of risk events has increased and/or 2. The loss or cost when a risk event occurs has increased, because the event now tends to be more serious or prolonged or because insurance doesn't compensate as well as it used to

Economic security: definition

To have adequate and reasonably stable income and assets and to have manageable expenses

Threats to economic security

1. 2. 3. 4. 5.

Low earnings No earnings Significant decline in income Significant loss of assets Large unexpected cost

The argument: rising economic insecurity

1. The incidence of risk events has increased and/or 2. The loss or cost when a risk event occurs has increased, because the event now tends to be more serious or prolonged or because insurance doesn't compensate as well as it used to

1. Economic insecurity reduces living standards

This is obviously true where the insecurity stems from low earnings or no earnings or a large unexpected cost

1. Economic insecurity reduces living standards

It's true also for drops in income Imagine two families with the same average income over a 20year period Family A: income is relatively constant Family B: income decreases substantially at some point and then recovers Family B may end up with a lower standard of living. When income declines it might be forced to sell its home or go heavily into debt in order to pay bills

2. Economic insecurity increases stress

Having a persistently low income and/or being at risk of a significant decline is stressful It's no accident that insurers advertise their product as providing peace of mind

3. Economic insecurity reduces happiness

People with lower income tend to be less happy Unemployed people tend to be less happy The effect of ups and downs on subjective wellbeing is asymmetrical: we hate loss more than we value gain An increase in something we like job, income, home, spouse, child, etc. tends to increase happiness a little

A loss tends to reduce happiness sharply

Insurance

For these reasons, insurance is very popular When people can afford it, they're usually willing to pay for it in order to enhance economic security

Insurance

At the individual level Across households: people with higher income tend to pay more in order to be better insured against loss Over time: when people's income increases, they tend to buy more insurance

Insurance

At the societal level Across countries: richer nations tend to tax and spend more

on social insurance than poor countries do Over time: as the United States has gotten richer, we've taxed more and spent more for insurance Taxes have risen from 15% of GDP in 1940 to 33% today, with about two-fifths of that going to social insurance (Social Security, Medicare, etc.)

Insurance

Some of our most popular government social programs Social Security, Medicare, unemployment compensation are ones viewed as insurance rather than redistribution

Has economic insecurity increased?

1. Low earnings: no 2. No earnings: maybe (old age, birth of child) 3. Significant decline in income: yes

4. Significant decline in assets: yes (home) 5. Large unexpected cost: yes

Has economic insecurity increased?

Increase in the incidence of risk events? No Increase in the loss or cost when a risk event occurs? Yes

Has economic insecurity increased?

In each area the increase may be smaller than is sometimes suggested But across areas, they appear to add up to a significant rise And even if the overall increase has been small, that's a surprising and disappointing development, as the trend up to the 1970s was in the direction of improved economic security

2. ECONOMIC INSECURITY DEFINITIONS, MEASUREMENTS AND DETERMINANTS. The existing definitions of economic insecurity have evolved around the notions of 1) the likelihood or risk of an adverse event in ones life; 2) perceptions of this risk; 3) anxieties and concerns associated with this risk; and 4) the ability to cope with or to recover from the costly consequences if an adverse event takes place (Bossert and DAmbrosio, 2009; Osberg, 1998; Osberg, 2010). Osberg (2010) argues that economic insecurity deals primarily with the future (be it the perceived likelihood of adverse events or the associated anxieties), contrasting it to the analysis of poverty, which deals primarily with current levels of consumption or wealth. Although one would expect poverty and insecurity to be positively correlated, low income is not a necessary condition for insecurity. People with low but stable

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incomes, such as pensioners, may plan for the future and be relatively secure about it. Similarly, people who enjoy relatively high current income or consumption levels but are involved in riskier ventures may feel very insecure about their future. Dercon (2006) goes further by arguing that there is a causal link between potential risk and insecurity, on the one hand, and poverty, on the other. The poor may choose to remain poor in order to avoid even more hardship induced by shocks, while the rich would choose to be involved in high-risk activities because they can afford to lose money. In a similar vein, Bossert and dAmbrosio (2009) assume that past experiences and current wealth are important in that they provide self-confidence and the buffer stock to deal with possible future adverse events. They posit that past, present and future are all involved in shaping economic insecurity. The concept of economic insecurity is closely related to the concept of vulnerability. Dercon (2006) defines vulnerability as the existence and the extent of a threat of poverty and destitution; the danger that a socially unacceptable level of wellbeing may materialise. Osberg (2010) states that both insecurity and vulnerability deal with fears of the uninsured hazards of an uncertain future. However, Osberg also points to an important distinction between the two notions: economic insecurity is related to the anxieties of all people, regardless of their income or wealth level, while vulnerability focuses more narrowly on the risks of poverty.

3.2 Economic Insecurity and Unemployment Job insecurity, and the risk of unemployment, is central to a conception of economic insecurity indeed so central that occasionally they are assumed to be identical. 3.1 Economic Insecurity due to Illness In Dominitz and Manskis (1997) examination of subjective perceptions of economic hazards, the chance of being without health insurance coverage was explicitly assessed as a major life risk
Understanding the causes of economic insecurity and designing policies to deal with it could improve peoples lives in many often far-reaching and unexpected ways.

Economic Insecurity is rarely discussed in the professional economics literature and has received little emphasis in recent economic policy making in OECD nations. This paper argues that economic insecurity should receive more attention, because it affects individual well-being, personal identity and labor market behavior and because the welfare state was largely motivated by a desire to decrease insecurity. The paper then examines trends in the economic implications of four sources of economic insecurity illness, unemployment, widowhood and old age - and discusses the differences between economic insecurity and risk, before turning to a discussion of how best to measure economic insecurity. 2. Why might economic insecurity matter? One reason to think that economic insecurity might matter is the fact that governments

have spent a lot of money, over many years, to reduce it. Increasing the economic security of the populace has been a major goal of the welfare state, which has produced substantial levels of public expenditure in all developed economies. Indeed, Article 25 of the United Nations Universal Declaration of Human Rights (1948) declared economic security to be a basic human right: Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other loss of livelihood in circumstances beyond his control.