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A multidimensional approach to measuring economic insecurity: the case of Chile

Prieto, Joaquin (2021) A multidimensional approach to measuring economic insecurity: the case of Chile. International Inequalities Institute Working Papers (70). International Inequalities Institute, London School of Economics and Political Science, London, UK.

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Abstract

This paper proposes a strategy to measure economic insecurity in countries in the Global South. It builds a 'Multidimensional Economic Insecurity Index' (MEII) that combines four indicators of economic vulnerability that cause stress and anxiety: unexpected economic shocks, unprotected employment or non-workers in the household, over-indebtedness and asset poverty. The index offers a measure that directly relates economic uncertainty to stress and anxiety due to the lack of protection and buffers to face an unexpected economic shock. The MEII is applied to Chile using Survey of Household Finances (SHF) cross-sectional data (2007, 2011, 2014 and 2017). The results show that i) about half of the Chilean households experienced, on average, two or more economic vulnerabilities during the last decade with an intensity of 2.3 vulnerabilities, and ii) economic insecurity affects households on the entire income distribution, even in the highest income deciles groups. By identifying the groups of households most affected by economic insecurity and its trend in recent years, applying the MEII in countries such as Chile provides relevant information to monitor, evaluate and improve social safety nets besides labour market regulations.

Item Type: Monograph (Working Paper)
Official URL: https://www.lse.ac.uk/International-Inequalities/P...
Additional Information: © 2021 The Author
Divisions: International Inequalities Institute
LSE
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: I - Health, Education, and Welfare > I3 - Welfare and Poverty > I31 - General Welfare; Basic Needs; Living Standards; Quality of Life; Happiness
D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Date Deposited: 25 Oct 2021 07:45
Last Modified: 25 Oct 2021 07:45
URI: http://eprints.lse.ac.uk/id/eprint/112490

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