Standing On Shaky Ground

ESI Economic Security Index
Standing on Shaky Ground

AMERICANS' EXPERIENCES WITH
ECONOMIC INSECURITY
December 2010
Jacob S. Hacker
Philipp Rehm
Mark Schlesinger
With support from The Rockefeller Foundation

ESI Economic Security Index
The Economic Security Index (ESI), developed by political scientist

Jacob Hacker and a multi-disciplinary research team with support from
the Rockefeller Foundation, is designed to provide a meaningful, succinct
measure of Americans’ economic security. Professor Hacker is based at the
Institution for Social and Policy Studies at Yale University, which aims to
facilitate interdisciplinary inquiry in the social sciences and research into
important public policy arenas.
The ESI is part of the “Campaign for American Workers” initiative of

the Rockefeller Foundation. The initiative strives to improve economic
security among American workers and their families, in part by improving
knowledge and understanding among policymakers and thought leaders of
the dimensions of American economic security.
The ESI research team has been guided by a technical committee retained
by the Rockefeller Foundation to provide oversight and to reinforce the
intellectual and analytical integrity of the resulting work. Chaired by
Brookings Institution economist Henry Aaron, the technical committee is
comprised of seven leading experts on economic security:
Henry Aaron (Brookings Institution)

Gary Burtless (Brookings Institution)
Henry Farber (Princeton University)
Robert Greenstein (PrESIdent, Center on Budget and Policy Priorities)
Larry Mishel (Director, Economic Policy Institute)
Alicia Munnell (Director, Boston College Center on Retirement Research)
Robert Solow (Nobel Prize in Economics, 1987)

Executive Summary
This report draws on two new surveys fielded in the spring
and fall of 2009 that paint a comprehensive and sobering
portrait of Americans’ experience with economic insecurity
and their capacity to cope with economic instability.
Collectively termed the Survey of Economic Risk Perceptions and Insecurity

(SERPI), these surveys focus on four domains of economic life: employment,
health care, family, and wealth. In each, they identify how often households
experience various economic disruptions, how frequently those disruptions
coincide across the four domains and persist over time, and what imprint
those disruptions leave on Americans’ expectations, concerns, and ability to
meet basic economic needs. Because parts of the survey were modeled after a
separate 2007 poll, the SERPI also shows how Americans’ outlooks changed in
response to the recent economic downturn.
These repeated snapshots convey a powerful picture of Americans standing on
shaky ground, rocked by economic tremors whose consequences include not
just worry and anxiety but severe economic hardship. Economic shocks were
strikingly widespread in 2009.
n I n the 18 months from March 2008 to September 2009, fully 93 percent of
households experienced at least one substantial decline in their wealth or
earnings or substantial increase in nondiscretionary spending, most often for
medical needs or assistance to family members.
n N
early seven in ten households saw their earnings substantially fall or their
nondiscretionary expenses substantially rise.
n D
uring this 18-month period, 23 percent of households reported a drop of at
least a quarter of their annual household income. This confirms the findings
of the Economic Security Index (ESI), an integrated measure of economic
security based on publicly available statistics. Projections based on the ESI
show that the share of Americans experiencing large income losses was
higher in 2009 than at any point in the last quarter century.
Though intensified by the downturn, Americans’ economic insecurity has been
growing for years, and it appears to have little diminished since 2009.
n W
hile public concerns about job security rose dramatically as the economy
weakened, worries about other risks to economic security—debt, retirement
savings, medical costs, health insurance, and even housing stability— were
already as common in 2007 as they were in the depths of the recession.
n A
ccording to separate opinion surveys, concerns about retirement savings and
medical costs did not diminish at all between the summers of 2009 and 2010,
and concerns about the job market declined only slightly.
standing on shaky ground 1

Economic instability leads not just to uncertainty but to anxiety and economic
hardship. This hardship is experienced not just by those at the bottom of the
economic ladder but also by those squarely in the middle class.
n y the spring of 2009, 78 percent of Americans were quite worried about at
B
least one risk to their overall economic security.
n ouseholds experiencing major economic dislocations are, on average, three to
H
four times more likely than otherwise comparable households to report being
unable to meet multiple basic needs, such as food, shelter, and medical care.
n ore than half of families with incomes between $60,000 and $100,000 that
M
experience employment or medical disruptions report being unable to meet at
least one basic economic need.
n ouseholds with dependent children appear to be more at risk of
H
experiencing problems in the face of economic instability than do households
without children.
Looking forward, Americans appear extremely vulnerable to future economic
shocks, in part because of the wearing down of their basic household “buffers”
against economic risks, such as personal wealth and the potential to borrow
from family and friends.
n y the fall of 2009, roughly three in ten Americans appeared highly vulnerable to
B
additional shocks; perhaps as many as half appeared at least partially vulnerable,
in the sense that their buffers against economic instability were limited.
n uffers against economic instability are eroded by persisting and clustered
B
economic shocks, depleting the security of even previously prepared
economic households.
n hile economic shocks are broad-based, the private buffers that households
W
have against economic risks are much weaker for less affluent and less
educated households than for higher-income and well-educated households.
Economic instability is so disruptive because shocks frequently persist over
time, come clustered together, and occur at roughly the same time in multiple
domains (employment, health care, family, and wealth).
n bout half of all the economic shocks experienced in 2008 reoccured in the
A
same households in 2009; these “persisting” shocks are associated with higher
levels of unmet need.
n I n a given domain, households often experienced repeated shocks in close
succession. For example, more than a third of households that experienced a
shock in employment or medical expenses experienced multiple shocks in the
same area.
n f those Americans who reported persisting disruptions of employment,
O
three-quarters also experienced persisting shocks in at least one of the other
three domains of economic life.
2 economic security project

Standing on Shaky Ground
americans’ experiences with
economic insecurity
Three years after the onset of the recession, public concerns
about the economy remain high.
Yet strikingly little is known about how Americans perceive their economic
security, how those perceptions relate to their economic experiences, or how
experienced instability affects households, well-being.
This report fills this gap. It draws on two new surveys fielded in the spring and
fall of 2009, collectively termed the Survey of Economic Risk Perceptions and
Insecurity (SERPI). The SERPI focuses on four major domains of Americans’
economic lives: (1) employment; (2) wealth (housing, retirement savings, and
other asset holdings); (3) health care; and (4) families.
In each area, the SERPI examines not just the economic “shocks” that
Americans experienced—whether loss of resources or increases in
nondiscretionary spending, such as medical costs—but also the effects of those
shocks on Americans’ lives, expectations, and concerns for the future. Because
parts of the survey were modeled after a poll on economic security conducted
just before the downturn, the SERPI also shows how Americans’ outlooks
changed in response to the recession.
As suggested by the title of this report, many Americans are—and see
themselves to be—standing on shaky ground. The recent economic downturn
represented an especially powerful quake, emanating from two distinctive
epicenters: declining employment and disrupted financial markets. Yet
Americans faced jarring economic shocks even before the downturn, and
continue to do so today. The SERPI and related evidence suggest that economic
insecurity has become the rule, not the exception, for many Americans—even
in good times.
Economic shocks, like an earthquake, do not consist of a single tremor.
Households experiencing an economic shock are also more likely to
experience that same shock again in the near future, to face other shocks in
the same domain, and to be hit simultaneously by shocks in other domains. This
persistence and clustering means that even the most prudent households can lose
their financial footing. Although poor households are most vulnerable because
they often lack the financial resources to buffer economic disruptions, the security
and well-being of even more affluent households are at risk.
The damage is often severe. Households experiencing major economic
dislocations are, on average, three to four times more likely than otherwise
comparable households to report being unable to meet multiple basic needs,
such as food, shelter, and medical care. Strikingly, these effects are not limited

to those at the bottom end of the income distribution: more than half of
families with incomes between $60,000 and $100,000 that experience persisting
medical or employment shocks report being unable to meet at least one basic
economic need.
This pattern of repeated shocks underscores how crucial basic safeguards
against economic insecurity are. Yet the SERPI suggests that Americans are
not adequately protected against future economic instability. By the fall of
2009, between a third and a half of all Americans appeared vulnerable to future
instability, in that they lacked substantial financial reserves, could not pay off
their current debt, and/or believed they could not borrow more than $5,000
from family and friends. This is in part the result of past instability: households
facing repeated economic shocks are about twice as likely to report having
inadequate buffers to deal with future economic uncertainties.
The remainder of this report lays out the basis for these conclusions, starting
with a description of the survey. The first part of the report examines the main
dimensions of American economic security: how often families experience
shocks; how they perceive the economic risks they face, including whether and
when they feel anxiety about them; and how these shocks affect their economic
well-being. The second part of the report considers how these experiences
and perceptions differ across major socio-demographic groups in American
society. The concluding section takes stock of these findings and considers their
implications.
The Survey of Economic Risk Perceptions and Insecurity

Long before the onset of the recent downturn, Americans worried about the
stability of their finances. Yet surveys assessing Americans’ perceptions of
economic security were both rare and limited in scope. Although researchers
documented varied forms of increasing economic risk, efforts to assess public
views and experiences were quite narrow and focused almost entirely on risks
related to job loss.1 Recent surveys have filled in some of the gaps, but they
too have generally asked questions about only one or two domains of risk.2
More important, these assessments of public attitudes have looked almost
exclusively at Americans’ expressed worries, with little attention to their actual
experiences or to their capacity to buffer economic shocks. 3
The SERPI in Brief

The Survey of Economic Risk Perceptions and Insecurity was designed to
fill this void. Fielded twice in 2009, it measured a wide range of events and
perceptions that could leave families feeling insecure, focusing on four broad
domains: employment, medical care, wealth, and familial arrangements.4
The survey gauged Americans’ worries using a consistent set of questions that
allows for comparison and ranking within and across these areas, as well as
over time. The survey also included an extensive set of questions about people’s

The SERPI was designed to complement
the Economic Security Index (ESI), an encounters with unstable economic
integrated measure of economic security circumstances in both the recent and
based on publicly available statistics. The the more distant past. Another cluster
ESI represents the share of Americans who of questions measured the capacity of
experience a 25 percent or greater year-to- households to safeguard themselves
year decline in their available household against economic risks or to buffer the
resources—their income minus their medical financial shocks that they experience.
costs and debt service—and who lack an Yet another set of questions assessed
adequate financial safety net to cushion the both the psychological consequences
fall. According to the ESI, economic insecurity of insecurity and its relationship to
has worsened since the mid-1980s, with a households’ ability to meet basic needs
projected one-in-five Americans experiencing involving food, housing, and essential
25 percent or greater losses in 2009. Yet the medical care.
ESI provides limited information about the
The SERPI was incorporated as an
dimensions and causes of these large losses,
independent part of the 2008–2009 Panel
or how Americans subjectively perceive these
Survey of the American National Election
objective economic events—all of which the
Studies, a survey funded by the National
SERPI uniquely illuminates. For more on the
Science Foundation for the past half
ESI, visit economicsecurityindex.org.
century. Panel surveys interview the same
individuals repeatedly over time. With
the financial support of the Rockefeller Foundation, the SERPI was fielded as
the sole questionnaire for the ANES panel in March (Wave 15) and September
(Wave 21) of 2009. The panel was constructed to provide a representative
sample of the American population aged 18 and older as of November 4, 2008.5
Data collected on economic experiences, perceptions, and expectations during
these two waves were merged with socio-demographic and other personal
characteristics collected from respondents in other waves of the survey.
Ensuring Comparable, Accurate Measures of Perceptions

To allow comparison of pre- and post-recession responses, parts of the SERPI
were modeled after a poll sponsored by the Rockefeller Foundation in the
spring of 2007. The core of this 2007 survey was a question about “your family’s
economic security” defined in general terms.6 The survey also asked about
concerns related to more specific economic risks, including losing one’s job,
facing large out-of-pocket medical spending, and lacking adequate income to
pay for a comfortable and secure retirement.7 All told, the survey asked about
fifteen distinct economic risks. In each case, respondents were asked if they
were “very,” “fairly,” “somewhat,” or “not at all” worried about each risk.8
To assess the frequency with which worries coincided with bad experiences,
a matched set of questions was asked about respondents’ experiences with
economic instability (referred to below as “experiencing an economic shock”).
For example, worries about employment were matched with questions regarding
whether any adults in the household had lost their jobs. Respondents in the
March 2009 SERPI were asked about whether they had experienced the event

Economic Shocks Measured by the SERPI
Employment Wealth
n unemployed not by personal n retirement benefits at work cut
choice (respondent or immediate substantially
family member) n value of investments or retirement
n lost more than a month of work funds declined substantially
due to serious illness or injury n value of house declined
substantially
Health Care
n lost health insurance Family
n major out-of-pocket medical n divorced or separated from
expenses as the result of serious spouse
illness or injury (respondent or n spent a substantial sum helping
immediate family member) out extended family
n paid a lot more for health n spouse/partner passed away
insurance than expected
in the prior twelve months, and those responding on the September 2009 wave
were asked if they had experienced the event in the past six months. For
those completing both waves of the survey, therefore, the SERPI provides a
unique 18-month history from March 2008 to September 2009 of Americans’
experiences with economic risks during the recession. The appendix to this
report describes the survey in greater detail and discusses some of the more
technical issues raised by its implementation and interpretation.
Americans’ Experiences of Economic Insecurity

Almost every American’s economic security was disrupted in the 18 months
between March 2008 and September 2009. These disruptions are evident in the
frequency, character, and consequences of the economic shocks experienced
by American households.
Economic Instability Touches Almost Every American

The SERPI included measures of eleven distinct shocks related to household
earnings or nondiscretionary spending (see text box). During the 18 months
preceding the fall of 2009, over 90 percent of respondents reported experiencing
at least one shock in the domain of employment (two measures), wealth (three
measures), health (three measures), or the family (three measures). While
it is not surprising that the simultaneous downturn in the housing and stock
markets destabilized wealth for many Americans who might otherwise have felt
secure, almost seven in ten (68 percent) of all Americans experienced a shock
related to domains other than wealth, either an unexpected loss of earnings or
an increase in nondiscretionary spending.
These shocks were often quite substantial. During these 18 months, almost a
quarter of all households reported a decline in earnings totaling 25 percent or
more of annual income. This confirms the findings of the Economic Security

Fig. 1 Prevalance of Economic Shocks
Spring 2008 through Fall 2009
Employment Family Needs
80% 80%
80% 80%
70%
70% 70% 70%
60% 60%
60% 60%
50% 50%
50% 50%
40%
Percentage of Americans Experiencing Shocks
40% 40% 40%

30% 30%
30% 30%
20% 20% 20%
20%
10% 10% 10%
10%
0% 0% 0%
0% Any Medical Cost Out‐of‐Pocket Cost
Any Medical Cost Out‐of‐Pocket Cost Premium Cost Up
Premium Cost Up Lost Insurance
Lost Insurance
Any Wealth ShockAny Employment Shock
Any Housing Value Down
Employment Shock Stock Value Down
Lost Job
Lost Job Too sick
Sick to
Retirement Benefits To Work
Work
Too Sick To Work
Cut for 1+ month Any Family Shock Financial Aid to Family
Shock Divorce Partner/Spouse Die
Household Wealth Medical Costs

80% 80% 80%
80%
70% 70% 70%
70%
60% 60% 60%
60%
50% 50%
50% 50%
40% 40%
40% 40%
30% 30%
30% 30%
20% 20% 20%
20%
10% 10%
10%
10%
0% 0%
0%
0% Cost Major
Any Medical
Any Medical Cost Out‐ofOut-of-Pocket
‐Pocket Cost
Out‐of‐Pocket Cost Premium Cost Up
Premium Cost Up Lost Insurance
Lost Insurance
Any Employment Shock
Any Employment Shock Lost Job
Any Wealth Shock Lost Job
Housing Value Down Too Sick To Work
Too Sick To Work
Stock Value Down Retirement Benefits
Retirement
Shock Cost Financial Aid to Family
Any Family Shock Divorce Partner/Spouse Die
Cut Cut
Benefits
index, an integrated measure of economic security based on publicly available

statistics that suggests that the share of Americans experiencing large income
losses was higher in 2009 than at any point in the last quarter century. (For more
information, see the prior report in this series, “Economic Security at Risk:
Findings from the Economic Security Index,” July 2010.)
As Figure 1 shows, the most common form of economic disruption involved
losses of household wealth, which were experienced by more than three-
quarters of all households. Shocks related to medical costs were the second
most common, experienced by about half of all households. A third of all
households reported some disruption of employment; shocks caused by family
needs were about as frequent.
Economic Shocks Often Persist over Time

Economic shocks may be isolated—a one-time or infrequent event in a family’s
life. However, once experienced, a shock may reoccur persistently over time or
coincide with other economic shocks. Because the SERPI assessed experiences
at two points in time, it is possible to determine the proportion of those who
experienced a shock in the year prior to March 2009 who also reported that
same shock in the subsequent six months.
As it turns out, such “persisting” shocks are close to the norm among those
experiencing an economic shock: About half of all respondents who experienced

Frequency of Multiple Shocks in Each Domain
Frequency of Multiple Shocks in Each Domain
Fig. 2 Frequency of Multiple Shocks in Each Domain
80%
Percentage Experiencing Shocks
80%70%
70%60%
60%50%
50%40%
40%30%
30%20%
20%10%
10% 0%
0% Employment Medical Cost Wealth Family
Employment Medical Cost Wealth Family
Only Single Shock Multiple Shocks
Only Single Shock Multiple Shocks
a shock in the first year reported that it reoccurred in the next six months.
Persisting shocks are most common in the wealth domain and least common in
the family domain. As documented below, persisting shocks are more likely to
produce negative effects for the households that experience them.
Multiple Shocks Are Common

Many households experience multiple shocks in the same domain. As Figure
2 shows, these are most common for declines in wealth: More than half of all
Americans who experienced at least one wealth shock (such as a decline in
stock value) reported other wealth shocks (such as declines in housing value
and reduced retirement benefits) over the same time period. A multiplicity of
shocks is least common for family disruption (only 10 percent who experienced
a family shock reported multiple shocks). Employment and medical domains
fall in between these extremes.
The most frequent form of clustering, however, occurs across risk domains
rather than within them. Figure 3 indicates that households experiencing
economic instability in one domain more often than not also experience shocks
in other domains at the same time. For instance, almost three in four Americans
who experienced a persisting shock to employment between the beginning of
Fig. 3 Persisting Shocks across Domains
Persisting Employment Shocks
6.7% Persisting Employment Shocks
Only
Only
23.3% Only
Persisting Shocks in
Employment + One Other
Domain
Employment + One Other
34.3% Employment + One Other
Domain
Employment + Two Other
Domain
Domains
Persisting Shocks in All Four
Domains
Domains
35.7% Domains
Domains
Domains

d
sity of Concern Rising Concerns About Economic Insecurity
Rising Concerns About Economic Insecurity
airly Worried
2007 to 2009
2007 to 2009
Intensity of Concern
60% Rising Concerns About Economic Insecurity
Fairly Worried
12.5% Rising
Fig. Concerns
4 Rising About
concerns 2007 to Insecurity
2007 to 2009
Economic
About Economic 2009
Insecurity
28.5% 12.5% 50% 60% 2007
2007 to 2009
2007 to 2009
to 2009
26.2%
26 2% 28.5%
60%
of Americans
Percentage of Americans
26.2%
26 2%
40% 50%
6.1%
6.1% 50%
Percentage of Am
19.7% 19.7%
Percentage Reporting Worry
Percentage Reporting Worry rry
Worry
Wo
16.4% 16.4% 30%

ng Wo
Wo
40%
40%
Percentage
Reporting
Reporti ng
ng
6.2% 6.2% 20% 30%

11.6%
11.6% 14.0%
30% figure 4
PercPercentage
entage
Percentage
entage
14.0% 20%
10%
Perc
8.4% 20%
18.6%
8.4% 10%
17 0%
17.
18.6% 0%
10%
Spring 2007
Spring 2007
Spring 2009
Spring 2009
2009
Fall 2009
2007
Spring 2007
Spring 2009
Spring 2009
2009
Fall 2009
Spring 2007
Spring 2007
Spring 2009
Spring 2009
2009
Fall 2009
2007
Spring 2007
2009
Spring 2009
2009
Fall 2009
2007
Spring 2007
2009
Spring 2009
2009
Fall 2009
2007
Spring 2007
Spring 2009
Spring 2009
2009
Fall 2009
Spring 2007
Spring 2007
Spring 2009
Spring 2009
2009
Fall 2009
17 0% 12.8%
17. 0%
Spring 2007
Spring 2007
Spring 2009
Spring 2009
2009
SpFall 2009
Spring 2007
Spring 2007
Spring 2009
Spring 2009
2009
Fall 2009
Spring 2007
Spring 2007
Spring 2009
Spring 2009
2009
Fall 2009
2007
Spring 2007
2009
Spring 2009
2009
Fall 2009
Spring 2007
Spring 2007
2009
Spring 2009
2009
Fall 2009
Spring 2007
Spring 2007
Spring 2009
Spring 2009
2009
Fall 2009
Spring 2007
Spring 2007
Spring 2009
Spring 2009
2009
Fall 2009
24.1%
Fall
ring
Fall
Fall
ring
ring
Fall
ring
ring
Fall
ring
Fall
Fall
24.6% 0%
ring 2009Fall
Fall
Fall
ring
ring
Fall
ring
SpFall
SpFall
Fall
12.8%
Sp
Sp
Sp
Spring 2007
Spring 2007
Spring 2009
2009
Fall 2009
Spring 2007
Spring 2007
ring 2009
Spring 2009
2009
Fall 2009
Spring 2007
Spring 2007
ring 2009
Spring 2009
2009
Fall 2009
Spring 2007
Spring 2007
Spring 2009
Spring 2009
2009
Fall 2009
Spring 2007
Spring 2007
Spring 2009
Spring 2009
2009
Fall 2009
Spring 2007
Spring 2007
Spring 2009
Spring 2009
2009
Fall 2009
Spring 2007
Spring 2007
Sp
Sp
Sp
24.1% 9.7%
24.6% 22.1%
Fall
Fall
Fall
Fall
Fall
Fall
Economic Security Employment
Economic Security Employment Housing Stability
Housing Value Debt
Debt Retirement Medical Costs
Retirement Medical Cost
Health Health
23.9% Insurance Insurance
Sp
Sp
Sp
9.7% Sources of Insecurity
7.7% Sources of Insecurity
22.1% 16.7% Economic Security Employment Very Worried
Housing ValueFairly Worried Debt Retirement Medical Costs Hea
Very Worried Fairly Worried Insur
23.9% 18.1%
Sources of Insecurity
7.7% 2008 and the fall of 2009 also reported a Very Worried
persisting shock in one of the other
Fairly Worried
16.7% domains (wealth, health, and family), and often in several of them at once. About
18.1% a third of those with persisting employment shocks experienced a persisting
shock in just one of the other three domains. But almost half (44 percent)
experienced persisting shocks in three or more domains over these 18 months.
As these figures reveal, Americans’ lives are not simply disrupted by the
occasional unfortunate happenstance. Many experience a series of economic
shocks, the combined impact of which is much larger than any of the individual
shocks. When economic shocks both cluster and persist, the lives of even
the most prudent and careful households can be deeply disrupted and those
households’ expectations for the future can be
profoundly unsettled.
Americans’ lives are not
simply disrupted by the Widespread Worries about Economic
occasional unfortunate Insecurity
happenstance. Many The deep economic downturn of 2009 gave rise
experience a series of to widespread concerns among Americans. Prior
to the onset of the recession, about half of the
economic shocks.
American public worried somewhat about their
economic security considered in the most general
terms, with a quarter “very” or “fairly” worried. By the spring of 2009, more than
half (53 percent) of all Americans were very or fairly worried, with only about
one in ten “not at all” concerned. By the fall, concerns had slightly abated as
the public grew more sanguine about the stock market and the viability of their
plans for retirement.

Just as the recession amplified general concerns about economic security, it
also intensified worries about job loss. Employment concerns rose dramatically
as the unemployment rate rose from 4.5 percent in the spring of 2007 to 9.3
percent in the spring of 2009.
Yet worries about a host of other risks to economic security—debt, retirement
savings, medical costs, health insurance, and even housing stability—increased
more modestly between 2007 and 2009. More than 40 percent of Americans, for
example, were already very or fairly worried about “having enough money to
retire on” prior to the onset of the recession. The share very or fairly worried
about medical costs and health insurance also remained relatively stable
(and, in the case of health insurance, the share very worried actually dropped
between 2007 and 2009). In these areas, concerns were already notably high
before the downturn.
What Sources of Economic Instability Cause the Most Worry?

Scope
Scope of Concerns About Economic Security
of Concerns About Economic Security
The SERPI provides a more comprehensive portrait of economic concerns in
Spring 2009
Spring 2009
2009. Looking across the 15 different sources of potential worry, more than
three-quarters of all Americans reported that they were very or fairly worried
about at least one of these economic risks. Worries about wealth were the most
frequent cause of economic unease, though concerns about medical costs were
a close second.
Fig. 5 Scope
Scope of Concerns about Economic Security
Scope of Concerns About Economic Security
of Concerns About Economic Security
Spring
Spring 2009
Spring 2009
2009
Percentage Reporting Worry
80%
70%
60%
50%
40%
Lose/Find Job
/Find Job
Pension
Out of Pocket Cost
nsion
Any Economic Risk
Retirement
conomic Risk
Debt
tirement
Cuts f Pocket Cost
Lose Coverage
Due to Illnesseath/Divorce)
Lose Spouse (Death/Divorce)
ose Coverage
Coverage Cuts
Coverage Unclear
Help Family
overage Cuts
erage Unclear
Housing Stability
lp Family
using Stability
Lost Work Due to Illness
Due to Illness
30%
20%
Pe
10%
He
Lose
Re
0%
C
Lose/Find Job
/Find Job
Pension
Out of Pocket Cost
Long‐Term Care
Retirement
nsion
Any Economic Risk
conomic Risk
Debt
ng‐Term Care
tirement
f Pocket Cost
Lose Coverage
eath/Divorce)
Lose Spouse (Death/Divorce)
ose Coverage
Coverage Cuts
Help Family
Coverage Unclear
erage Unclear
Housing Stability
lp Family
using Stability
Lost Work Due to Illness
overage
Pe
He
Lose
Re
Employment Family Wealth Health

Employment Family Wealth Health
Very Worried
Very Worried Fairly Worried
Fairly Worried
Perhaps the most surprising finding is the prevalence of worries related

to the family. While employment concerns have received considerable
attention, insecurity related to the family realm is largely absent from the
agenda of the media and public officials. Yet Americans worry about family-
induced insecurities roughly as much as they worry about insecurities due to

employment: In the midst of a
dramatic economic downturn
about 39 percent of Americans
reported being very or fairly
worried about losing their job
(or, if out of work, finding
employment)—almost exactly the
same proportion who reported
being very of fairly worried about
losing their spouse/partner.
In light of the recent debate
over health care reform, it is not
surprising that Americans were
deeply worried about unstable
insurance enrollment, rising
premiums, and gaps in coverage. Yet during that debate, there was remarkably
little public discussion of the financial effects of time away from work due
to illness. Thus it is striking that about a third of the public was very or fairly
worried about losing several months of earnings due to an extended illness.
Worries about forgone income due to illness are just slightly less common than
concerns about losing one’s job and just as prevalent as concerns about losing
one’s health insurance.9
Are Americans’ Worries Reasonable?

Comparing the prevalence of worries and the frequency of shocks, Americans
appear to accurately assess the likelihood of some common risks. In the domain
of employment, for example, the frequency of shocks and the proportion of the
public worried about these events match relatively
Worries about forgone closely. However, this close match does not hold
for all shocks. About as many Americans worry
income due to illness are about losing their partner or spouse as about
just slightly less common substantial out-of-pocket medical expenses, and
than concerns about many more do so than are worried about needing
to assist family members in financial need. Yet
losing one’s job and just divorce or death of a spouse or partner is actually
as prevalent as concerns far less common than either of these latter sources
about losing one’s health of nondiscretionary spending. Similarly, worries
insurance. about losing insurance coverage are almost as
common as are worries about high out-of-pocket
medical spending. Yet losses of insurance coverage
actually occur only about half as often as do high out-of-pocket medical costs.
These divergences may reflect the public’s misperception of certain risks.
People tend to inflate the chance of unpredictable events that induce great
fear or anxiety.10 Yet the heightened worry associated with certain risks may
also reflect the expected severity of the resulting economic losses. An intuitive

measure of expected severity is the estimated length of time it takes for a
household’s financial circumstances to return to the level enjoyed before the
event occurred. When asked to estimate how long recovery would typically
take, Americans predicted that family disruptions (death of spouse or divorce)
would have the longest-lasting consequences, with nearly eight in ten (78
percent) saying it would take more than six months to recover economically.
The consequences of illness (either out-of-pocket spending or time lost from
work) came close in terms of their anticipated duration. Unemployment and
investment losses, by contrast, were seen as having the most transitory effects.11
Substantial Anxiety about Economic Insecurity

While the previous measures concern people’s worries about economic
insecurity, worries may not affect the quality of individuals’ lives substantially.
Thinking about negative events is rarely pleasant, but worries are not always
associated with intense negative feelings.12 Extreme anxiety, by contrast, can
induce physiological stress responses. If anxiety is chronic, these stressors can
lead to declines in both physical and mental health.13
According to the spring and fall 2009 waves of the
SERPI, roughly 17 to 19 percent of the public reported A total of 28 percent of all
themselves to be very or extremely anxious on each Americans were either very
wave of the survey when thinking about economic
insecurity. A total of 28 percent of all Americans were or extremely anxious about
either very or extremely anxious about their economic their economic prospects
prospects on at least one of the two surveys; 9 percent on at least one of the two
had persisting high anxiety across both surveys.
surveys.
Not surprisingly, those who were most worried about
specific forms of economic uncertainty proved to be
most anxious as well: Of those who reported themselves to be very worried
about unstable employment, medical costs, fluctuating wealth, or family-related
shocks, roughly 40 percent were very or extremely anxious about economic
insecurity. By contrast, among those who reported no intense worries about
these specific economic risks, less than 2 percent felt intense anxiety about
economic insecurity.
A similar pattern is evident for those who experienced shocks, as is evident
in Figure 6. Among the households that had been free of any of the eleven
shocks measured in the SERPI, only about 5 percent reported themselves to
be very or extremely anxious. Among households that had experienced one or
more shocks, the frequency of this intense anxiety jumped to between 15 and
25 percent depending on the domain of risk. And for all four domains, when
households experienced shocks that persisted across the two time periods
in the survey, they reported even more extreme anxiety. After experiencing
persisting shocks unrelated to wealth, about a third of all Americans reported
themselves to be very or extremely anxious about economic uncertainty.

omic Security
mely Anxious
0.8%
2.7% Fig. 6 Economic
35%
Shocks and Anxiety about Economic Instability
2008–2009
35% 30%
7 0%
7.0%
10.8% 30% 25%
13.4% 25% 20%
20% 15%
8.3%
7.4% 15% 10%
14.2% 10% 5% Ext
5% Extremely Anxious Ver
0%
8.2% Very Anxious
Persisting Shocks
Persisting Shocks
Persisting Shocks
Persisting Shocks
ersisting Shocks
ersisting Shocks
ersisting Shocks
ersisting Shocks
No Shocks At All
Recent Shock
Recent Shock
o Shocks At All
Recent Shock
Recent Shock
t Shock
t Shock
ock ock
t Shock
Wealth Shocks Only
lth Shocks Only
Past Shock
Past Shock
Past Shock
Past Shock
t Shock
t Shock
t Shock
t Shock
0%
4.9%
Persisting Shocks
Persisting Shocks
Persisting Shocks
Persisting Shocks
ersisting Shocks
ersisting Shocks
Shocks
Shocks
Recent Shock
No Shocks At All
o Shocks At All
Recent Shock
Recent Shock
Recent Shock
t Shock
t Shock
t Shock
t Shock
Wealth Shocks Only
lth Shocks Only
Past Shock
Past Shock
Past Shock
Past Shock
t Shock
t Shock
t Shock
t Sht Sh
8.6%
Pas
ersistingPas
ersistingPas
Pas
Recen
Recen
Recen
Recen
Pas
Pas
Pas
Pas
Recen
Recen
Recen
Recen
8 1%
8.1%
N
12.5%
N
14.0%
Employment Health Wealth Family
Employment Health Wealth Family
Recent = In Past Six Months, but not in Past 7‐18 months
Recent= In Past Six Months, but Not in Past 7-18 Months
Recent= In Past Six Months, but not in Past 7‐18 months
Past = In Past 7‐18 Months, Not Reoccuring
= In Past 7-18 Months, Not Reoccuring
Past
Past = In Past 7‐18 Months, Not Reoccuring
Persisiting = In Past 6 Months AND in Past 7-18 Months
Persisting+ In Past 6 Months AND in Past 7‐18 Months
Persisting+ In Past 6 Months AND in Past 7‐18 Months
The Impact of Insecurity on Economic Well-Being

The frequency of anxiety and the degree to which it occurs in tandem with
economic shocks strongly suggest that Americans fear the potentially serious
economic dislocations these shocks create. The SERPI allows us to examine
this implication more directly. A series of questions prompted respondents
to indicate if they or members of their household had unmet needs for food,
housing stability, or medical care—for example if they had gone hungry, lost
their home, or failed to see a doctor (see the Technical Appendix for the specific
questions asked). Because these unmet needs are measured on each wave of
the survey, respondents could report up to six unmet basic needs over the 18
months covered by the SERPI.
Economic Shocks Are Associated with Unmet Needs

Some households that have not experienced any economic shocks nonetheless
report unmet needs, because their earnings are modest and savings are limited.
Indeed, roughly one in five households that have experienced no economic
instability (no shocks in the past 18 months) still report having at least one
unmet basic need.14 But households that have experienced economic shocks—
especially persisting shocks—report much higher levels of unmet need. As
Figure 7 shows, this is particularly true of employment and medical shocks:

70%
Economic
Economic Shocks and Unmet Basic Needs
Shocks and Unmet Basic Needs
60% 70.0%
2008‐2009
2008‐2009
Fig. 7 Economic Shocks and Unmet Basic Needs
2008–2009
50% 60 0%
60.0% 70%
Percent Reporting Unmet Needs
et Needs
50.0% 60%
40%
Needs
ng Unmet
Percent Reporting Unmet Needs
et Needs
40.0% 50%
30%
Unmet
ent Reporting
ng Unm et
30.0% 40%
20%
entReporting
Reporting
ent
20.0% 30%
Perc
10%
Percentageent
10.0% 20%
Perc
0%
0.0%
Persisting Wealth Shocks
Persisting Family Shocks
ocks
No Shocks At All
No Shocks At All
Any Employment Schock
mployment Shocks
Any Health Cost Shock
Persisting Health Cost Shocks
Any Wealth Shock
Any Family Shock
alth Cost Shock
Any Wealth Shock
ockock
10%
ocks
No Shocks At All
No Shocks At All
Any E Employment Schock
Any Wealth Shock
Any Family Shock
Any Wealth Shock
Sh Sh
Sh Sh
Family
Family
0%
Family
Family
No Shocks At All
No Shocks At All
Any Family Shock
Any Wealth Shock
Any Wealth Shock
Any Family Shock
Heocks
Any
ting
Any
ting
Any Sh
rsis
Persisting Employment
Persis
Persisting
Pe
One Unmet Need Multiple Unmet Needs
One Unmet Need Multiple Unmet Needs
Shocks to wealth and family are associated with aMultiple Unmet Needs

One Unmet Need doubling of households
reporting any unmet need and a fivefold increase in households reporting
multiple unmet needs, whereas shocks to employment and medical spending
are associated with a tripling of households reporting any unmet needs and a
sevenfold increase in the proportion of households reporting multiple unmet
needs. For the most part, then, basic needs seem to be far more threatened
by disruptions of employment or by unexpected medical spending than by
emergencies in the family or by unanticipated drops in wealth.15
Are the Effects of Insecurity Distinct from Economic Disadvantage?

Households that report unstable economic circumstances are far more likely
to experience both heightened anxiety and unmet needs. But families that face
unstable economic circumstances might have other attributes that make them
vulnerable to these bad outcomes as well—most notably, lower incomes. Less
affluent households are more likely to have unmet needs and also to have less
stable employment and less comprehensive health insurance. Thus, it is crucial
to examine whether economic insecurity is independently associated with
hardship, even after household income is taken into account.
To do that, it is helpful to group respondents into household income quartiles—
four equally sized groups ranked from poorest to richest. Comparing within

each quartile, it becomes clear that even among the top 25 percent of
Americans—and, indeed, within every income quartile—economic instability is
associated with an increased level of unmet basic needs (Figure 8). A quarter
of families in the lowest income quartile (those with annual incomes of less
than $35,000) reported some unmet needs even if they had experienced no
economic instability in the previous 18 months. But among those that had faced
economic instability, unmet needs were far more common. Among those who
had experienced persisting employment shocks, for example, almost 90 percent
reported some unmet basic needs, and 56 percent reported multiple unmet
needs.
Strikingly, the same relationship holds among families in the third quartile of
household income (annual incomes between $60,000 and $100,000). Among
those that experienced no economic instability, unmet basic needs were about
half as common as in the lowest income quartile, reported by about 12 percent
Unmet Needs Associated with Economic Instability,
Unmet Needs
of all households. Associated
For those withpersisting
who encountered Economic Instability,
economic shocks,
the level of unmet needsFor Selected Income Strata
For
was Selected Income Strataso, considering
far more common—strikingly
that these households are relatively well-off. About half of households in this
quartile that had experienced persisting shocks to employment or medical costs
100% reported some unmet need; almost 40 percent reported multiple unmet needs.
Even among solidly middle-class families, in short, economic instability is
90% associated with much higher levels of unmet basic needs.
80%
70%
Fig. 8 UnmetFor Selected Income Strata
For Selected
Needs Income
Associated Strata
with Economic Instability,
for Selected Income Strata
60% 100%
Reporting Unmet Needs
50% 90%
80%
40%
70%
30%
60%
20% 50%
10% 40%
Percentage
30%
0%
20%
Persisting Shocks Medical Costs
No Shocks At All*
Persisting Shocks Employment
sting Shocks Medical Costs
Costs
ocks At All*
No Shocks At All
No Shocks At All
Persisting Shocks Wealth
No Shocks At All
At All
sisting Shocks Employment
Shocks At All
ocksocks Wealth
Employment
rsisting Shocks Wealth
Shocks At All
rsisting Shocks Wealth
Persisting Shocks Family
isting Shocks Family
isting Shocks Family
Allocks Family
10%
No Shocks
Shocks At Medical
0% *
Persisting Medical Costs Shocks
No Shocks At All
No Shocks At All
sisting Employment Shocks
rsisting Wealth Shocks
isting Family Shocks
No Shocks At All
ocks
sting Medical Costs Shocks
sting Medical Costs Shocks
No Shocks At All
Shocks At All
At All
ocks All
Sh
No Sh
s Sh Sh
Shocks No
No
ocks
ocks At
Shisting
Shs Sh
ting
Cost
Cost
Sh
rsis
Pers
Pers
Pers
sistin g
No
No
No
No
sting
sting Medical
Medical
Pe
Pe
Pe
Pers
Pers
Pers
Pers
sting
Pe
Pe
Pe
Pe
Lowest Income Quartile Second Quartile Third Income Quartile Highest Income Q

Lowest Income Quartile Second Quartile Third Income Quartile Highest Income Quartile
Multiple Unmet Needs One Unmet Need
Multiple Unmet Needs One Unmet Need
* No respondents in this income strata reported unmet needs in the absence of economic shocks

Incomplete Buffers against the Impact of Economic Shocks
The impact of some economic shocks, such as high health care costs and partial
disability from work, can be lessened by purchasing insurance. Others, such as
unemployment and a complete inability to work, are at least partially insured by
public policies. But for many risks (including loss of a spouse, declining value
of investments, urgent financial assistance to one’s extended family, and lost
earnings apart from formal unemployment or disability), insurance protection is
generally either unavailable or beyond the means of the average citizen.
Households can guard against uninsured or partially insured risks only by
saving, borrowing from family and friends, or drawing on the equity of their
assets, such as their home or retirement account. The SERPI included several
questions about these informal risk buffers.16
At the core of these measures is the household’s self-assessed capacity to get
by without hardship should their income be interrupted for an extended length
of time. As Figure 9 shows, just over 29 percent of Americans reported that
their household could go six months or longer without experiencing hardship
if their earnings were to stop tomorrow. Yet nearly half of households could go
no longer than two months without hardship setting in; one in five could last no
more than two weeks. If the capacity to go at least three months without income
is treated as a threshold of adequate reserves (recall that almost a quarter of
all household experienced a drop of 25 percent or more in their annual income
in the 18 months preceding the fall of 2009), then more than half the American
population appears to lack adequate buffers.
Fig. 9 How Long Can Household Go without Income

Before Hardship Sets In?
19.4%
29.3%
Less than two weeks
Less than two weeks
Three to four weeks
Three to four weeks
9.2% One to two months
One to two months
Three to six months
Three to six months
Six months or more
Six months or more
18.7%
23.4%
Three additional measures of buffers in the SERPI are related to the capacity to
borrow: in financial markets (i.e., taking out a loan), drawing against equity (i.e.,
home equity loans), and through more informal mechanisms (i.e., from family
and friends). Combined with our measure of financial reserves, these offer a
multifaceted assessment of the ability of households to deal with unexpected
economic shocks. In the aggregate, they do not make Americans appear much

more secure. To be sure, about a
third of respondents anticipated
that they could borrow $5,000
or more from family or friends if
facing some urgent financial need.
However, 44 percent expected not
to be able to borrow at all, and one
in five considered themselves to be
so deep in debt that they doubted
that they could ever pay it off.
Why Household Buffers

Are Weak
Why does such a large share of
households have limited savings,
high levels of debt, and limited
capacity to borrow in times of need
from friends and family? Although
some Americans lack foresight or prudence, two other causes also come into
play: prior economic shocks and a basic lack of resources. Households’ buffers
are frequently depleted by shocks to earnings or nondiscretionary spending.
Comparing respondents who experienced a drop in income or loss of wealth
between the first and second waves of the survey (and had not experienced
a prior shock), those that did not experience an
economic shock between the two surveys saw a
Nearly half of households modest improvement in their risk buffers over the
could go no longer than two intervening six months. By contrast, those who did
months without hardship experience a shock reported degradation in all four
setting in. One in five could measures of buffer resilience.
last no more than two Lack of buffers is also strongly associated with
weeks. economic disadvantage, suggesting that resource
constraints are one important reason why some
families are ill-prepared against economic risks.
Understanding why such a large share of households have limited economic
buffers thus requires examining more closely who is most likely to experience
economic shocks without adequate protections—the question taken up in the
next section.
The Uneven Experience of Economic Insecurity

The SERPI documents that insecurity and instability are commonplace in
Americans’ economic lives, with consequences that are frequently severe for
even middle-class families. Nonetheless, the experience of insecurity varies
substantially across American society—across income and educational groups,
family types, and other important demographic characteristics. This is not

simply because the chance of major economic shocks (and especially clusters
of major shocks) is different for these various groups. The greatest disparities
in the experience of economic instability emerge when we consider the ways in
which households differ in their capacity to buffer the shocks that occur.
The Surprising Commonality of Economic Instability

During the recession, differences in exposure to economic disruptions were
remarkably modest, as Figure 10 suggests. Even putting aside wealth losses—
which are, not surprisingly, more frequent among more affluent Americans—
middle-income and well-educated Americans often experienced major
economic shocks. Employment-related instability was less frequent for more
advantaged Americans, but job loss was sufficiently common that it presented
a realistic and not uncommon worry: 16 percent of college graduates and 19
Fig. 10 Shocks and Worries by Sociodemographic Groups

70% 80%
Education
60% 70%
70% Education 80%
50% 60%
60% 70%
40%
50% Education 50%
30% 60%
40% 40%
Percentage of Group
20% 50%
30% 30%
10% 40%
20% 20%
0% "Very Worried" about
"Very Worried" about
10% 30%
at Least One Risk
at Least One Risk
ployment
ployment
Wealth
ployment
Wealth
Wealth
Medical Costs
Medical Costs
Medical Costs
Employment
Employment
Employment
alth
alth
alth
Costs
Costs
Costs
Family
Family
Family
10%
0% 20%
Co
Co
Co
We
We
We
0%
Medical
Medical
Medical
Least One Risk
atPersisting Shocks
at Least One Risk
ployment
ployment
Wealth
ployment
Wealth
Wealth
Medical Costs
Medical Costs
Medical Costs
Employment
Employment
Employment
alth
alth
alth
Costs
Costs
Costs
Family
Family
Family
Persisting Shocks 10%
EEmployment
mployment
Wealth
Medical Costs
alth
Costs
Co
Co
Co
Em
Em
Em
We
We
We
0%
Medical
Medical
Medical
We
Persisting Shocks
Persisting Shocks
Medical
EEmployment
mployment
Wealth
Medical Costs
alth
Costs
Em
Em
Em
High School
High School Some
Some College
College College Graduate
College Graduate
We
Medical
High School
High School Some College
Some College College Graduate
College Graduate
Lowest Quartil
Lowest Quartil
Lowest Quartile
Lowest Quartile
Race/Ethnicity
60% 60%
50% 50%
60% 60%
40%
40%
50% 50%
Percentage of Group
30%
40%
30%
40% 20%
30%
20%
30% 10%
20%
"Very Worried" about 0%
10%
20% 10%
at Least One Risk
at Least One Risk
Employment
ent
Medical Costs
ment
Costs
0%
dical Co
oym
10%
ploy
Medical
Persisting
Least One Risk
atPersisting Shocks
at Least One Risk
Employment
ent
Medical Costs
ment
Costs
Shocks
Wealth
Wealth
Wealth
Medical Costs
sts
Medical Costs
Medical Costs
Family
sts
Family
sts
Family
Employment
Wealth
Employment
Wealth
Employment
Wealth
Employment
osts
mily
Employment
osts
mily
Employment
osts
mily
ent
ent
ent
mpl
dical Co
0%
Em
oym
Medical Co
Medical Co
Medical Co
ploy
Medical
Persisting Shocks
Persisting Shocks
Wealth
Wealth
Wealth
Medical Costs
sts
Medical Costs
Medical Costs
Family
sts
Family
sts
Family
Employment
Wealth
Employment
Wealth
Employment
Wealth
Employment
osts
mily
Employment
osts
mily
Employment
osts
mily
ent
ent
ent
mpl
Em
Medical Co
Medical Co
Medical Co
Child
White African‐American Latino Child D
White African‐American Latino

80% Income Strata
80%
70%
Education 70% Income Strata
Income Strata
60%
Education Income Strata
Income Strata
60%
50%
50%
40%
Percentage of Group
40%
30%
30%
20%
at Least One Risk
at Least
"Very One Risk
Worried" about
"Very Worried" about 10%
at Least
"Very One Risk
at Least One Risk
Worried" about
at Least One Risk
at Least One Risk 10%
0% at Least One Risk
at Least One Risk
Persisting Shocks
Persisting Shocks
mpEEmployment
mpEEmployment
mpEEmployment
mpEEmployment
t t
Wealth
t t
Wealth
t t
Wealth
t t
Wealth
Medical Costs
Medical Costs
Medical Costs
Medical Costs
alth
alth
alth
alth
0%
s s
Family
s s
Family
s s
Family
s s
Family
Persisting Shocks
Persisting Shocks
loymen
loymen
loymen
loymen
Cost Cost
Cost Cost
Cost Cost
Cost Cost
Persisting Shocks
Persisting Shocks
We
We
We
We
EEmployment
EEmployment
EEmployment
EEmployment
Wealth
Wealth
Wealth
Wealth
Medical Costs
Medical Costs
Medical Costs
Medical Costs
alth
alth
alth
alth
Family
Family
Family
Family
Persisting Shocks
Persisting Shocks
mpmen
mpmen
mpmen
mpmen
Medical
Medical
Medical
Medical
We
We
We
We
loy
loy
loy
loy
Medical
Medical
Medical
Medical
Lowest Quartile
Lowest Quartile Second Quartile
Second Quartile Third
Third Quartile
Quartile Highest Quartile
Hihest Quartile
Hihest Quartile
Lowest Quartile
Lowest Quartile Second Quartile
Second Quartile Third Quartile
Third Quartile Hihest Quartile
Hihest Quartile
60% Child Dependents

60%
50%
Education
Child Dependents
50%
40%
Education
Child Dependents
40%
30%
Percentage of Group
30%
20%
20%
10%
10%
0%
Very Worried" about
Very Worried" about "Very Worried" about
t Least One Risk
t Least One Risk at Least One Risk
at Least One Risk
Employment
Employment
ent
ent
Wealth
Wealth
Medical Costs
Medical Costs
ment
alth
ment
alth
Costs
Costs
0%
Family
Very Worried" about

Very Worried" about Family Worried" about
"Very
Coal Co
Coal Co
oym
oym
t Least One Risk
t Least One Risk
We
We
at Least One Risk
at Least One Risk
Employment
Employment
ent
ent
Wealth
Wealth
Medical Costs
Medical Costs
ment
alth
ment
alth
sts
sts
Family
Family
oy
oy
Medical
Medical
al Co
al Co
ersisting Shocks
ersisting Shocks Persisting Shocks
Persisting Shocks
oym
oym
dic
dic
pl
pl
mpl
mpl
We
We
oy
oy
plEm
plEm
Medical
Medical
ersisting Shocks
ersisting Shocks Persisting Shocks
Persisting Shocks
dic
dic
mpl
mpl
Em
Em
Child Dependents No Children
Child Dependents No Children
70% Adults in Household

60%
Adults
Adults in Household
in Household
50%
40%
of Group
of Group
30%
20%
Percentage
Percentage
at Least One Risk
0%
Persisting Shocks
Employment
Employment
Employment
Employment
Wealth
Wealth
Wealth
Wealth
Medical Costs
Medical Costs
Medical Costs
Medical Costs
Family
Family
Coupled
Couple Single

percent of households in the highest income quartile reported themselves to
be very worried about at least one threat to continued employment. Economic
uncertainty in other domains—notably, medical care—was even more common:
About a quarter of the most economically advantaged households reported
themselves to be very worried about these risks.
No group in American society appears fully insulated from economic instability.
Among college graduates, for example, more than 63 percent experienced
persisting shocks to their wealth, almost 21 percent experienced persisting
shocks due to medical costs, more than 12 percent experienced persisting
shocks due to employment instability, and 11 percent experienced family-
related persisting shocks. By comparison, the prevalence of persisting shocks
among households headed by those with, at most, a high school degree was
more than 45 percent for wealth shocks, nearly 26 percent for medical shocks,
nearly 24 percent for employment shocks, and just over 13 percent for family-
related shocks—higher for every category but wealth, but only modestly so for
every domain but employment.
Starker Disparities in the Strength of Buffers

While exposure to risk during the recession did not vary as dramatically as
might be supposed, the strength of protections against those risks did. Thus the
significance of the uneven exposure to economic risks depends in large part on
the distribution of “buffers” against economic risks—insurance, savings, family
risk-sharing, and other resources that can be tapped in response to economic
instability.
We might expect that those whose lives are most affected by economic
turbulence would have the greatest incentive to prepare. What the SERPI
shows, however, is that those households that have the weakest buffers also
face the greatest risk. Because these risks are concentrated among households
Fig. 11 Uneven Financial Buffers against Economic Uncertainy

80
Socio-Economic Status, 2009
Percentage Reporting These Financial Circumstances
umstances
tances
80%
60
al Circcums
umstances
tances
60%
al Circcums
Financial
40
Financial
40%
These Fi
20
Percentage Reportingg Th
These Fi
20%
0
Percentage
0%
20
Percentage
20%
40
40%
High School Some College College Graduate Lowest Quartile Second Quartile Third Quartile Fourth Quartile
Can Borrow $5000+ from Family/Friends
Can Borrow $5000+ from Family/Friends Financial Reserves = 3 Months+ Income
Financial Reserves = 3 Months+ Income Drained Retirement Account to Pay Bills
Drained Retirement Account to Pay Bills Debt Too Large to Pay‐Off
Debt Too Large to Pay‐Off

80 Race and Ethnicity, 2009
60 %
60
PercenPercentage Reporting These Financial Circumstances umstances
tances
cumstances
Cirrcumstances
Percentage Reporting These Financial Circumstancesc umstances
rcumstances
60
Circcums
40 %
40
Financiall Cir
Ciral
40
al
ll Cir
Financi
20 %
20
ncia
ina Fi
Fese
20
ng These F
0%
ng These F
ngg Th
Th
0
tage Reporti
Percentage Reporting
0
ng
20 %
cenReporti
20
Percentage
20
Percentage
Percentage
tage
40 %
Per
40
40
60 %
60 White African-American Latino
Can
Borrow
from Family/Friends
$5000+ from Family/Friends
Can Borrow $5000+ Financial
Financial Reserves = 3 Months+ Income
Financial Reserves Reserves
= 3 Months+ = 3 Months+
Income
Financial Reserves = 3 Months+ Income Income
Retirement Account to Pay Bills
Drained Retirement Account to Pay Bills
Drained Debt Too Large to Pay‐Off
Can
Borrow $5000+ from Family/Friends Financial
Financial Reserves = 3 Months+ Income
Reserves = 3 Months+ Income
70
Family Composition, 2009
70%
60 80
60%
ercentage Reporting These Financial Circumstances
mstances
umstances
tances
ercentage Reporting These Financial Circumstances
mstances
50
50% 60
al Circcums
40
40%
Financial
30 40
30%
20
These Fi
20% 20
10
10%
0 0
0%
10
Percentage
10%
20
20
20%
P
30 40
P
30%
Couple Single Dependent Children No Dependent Children
40
40
Can Borrow $5000+ from Financial Reserves = 3 Months+ Income
Family/Friends Financial Reserves = 3 Months+ Income
that have faced longstanding economic disadvantages, households face serious

constraints in preparing against economic dislocations.
Which Americans are better prepared to cope with risks because they can
buffer them? Some of the differences charted in Figure 11 are unsurprising:
Risk buffers are more resilient for households with advantaged socio-economic
characteristics, whether measured in terms of educational attainment or
household income.

Unmet Needs By Family Composition
(With and Without Shocks)
60%
50% Other patterns, however, are less predictable. Although African-Americans

and Latinos have roughly similar economic circumstances, risk buffers for
40% the former are distinctly weaker, particularly the balance between debt and
financial reserves and the very limited capacity to borrow from family and
30%
friends—a difference that has been identified in prior research for wealth
20% holding, but not for these other forms of risk buffers.17
10% Also noteworthy is that households with children appear to be less adequately
buffered against risk than do other households. Their greater capacity to
0%
borrow from family and friends appears more than offset by weaknesses
Single Multiple Single
Single Single Multiple Single
Single Multiple No
No Children No
No Children No
No Children
evident
Adults in the other
Adults Adults three
Adultsmeasures
Adults of buffer resiliency.
Adults Children Children Children
The
No Unequal
No Shocks
Shocks Consequences
Any Shocks
Any Shocks of Economic
Nonwealth Shocks
Nonwealth Shocks Insecurity
No Shocks
No Shocks Any Shocks
Any Shocks Nonwealth Shocks
Nonwealth Shocks
How do unequal exposure to and protections against economic risk influence

households’ financial well-being? Figure 12 tells the story. Because respondents
from higher socio-economic status are both (modestly) less likely to experience
Unmet Needs By Education, Race/Ethnicity
Unmet Needs by Education, Race/Ethnicity
andand
Without Shocks)
(With(With Without Shocks)
70%
60%
Percentage with Unmet Needs
50%
40%
30%
20%
10%
0%
College Graduate
College Graduate
College Graduate
College Graduate
College Graduate
College Graduate
Latino
Latino
Latino
College
Some College
College
Some College
College
Some College
White
White
School
High School
School
High School
School
High School
African‐American
African‐American
African‐American
White
African‐American
African‐American
African‐American
High
High
High
Some
Some
Some
No Shocks Any Shocks Nonwealth Shocks No Shocks Any Shocks Nonwealth Shocks

Unmet NeedsNeeds
Fig. 12 Unmet By Family
by Family Composition
Composition
(With(With
and Without
and Shocks)
Without Shocks)
60%
50%
Percentage with Unmet Needs
40%
30%
20%
10%
0%
Single
Single Multiple No
No Children No
No Children No
No Children
Adults Adults Adults Adults Adults Adults Children Children Children
No Shocks
Nonwealth Shocks No Shocks
Nonwealth Shocks
shocks that might induce unmet needs and (substantially) more capable
of buffering those shocks when they occur, the consequences of economic
Unmet Needs
shocks for economic Byare
well-being Education, Race/Ethnicity
notably more negative for less advantaged
Americans, measured (With and Without Shocks)
in terms of education.
70% Differences by race and ethnicity are also striking. Given that African-Americans
60% have more risk exposure and less resilient buffers, it is not surprising that they
50% report very high levels of unmet needs when they experience economic shocks.
40% Latinos report comparable levels of unmet needs, and both groups report much
30% higher levels of unmet needs than whites. Yet,
20% more surprising, Latinos who do not experience
Households
10% with children
economic shocks report lower levels of unmet
appear
0% to be less adequately needs than either African-Americans or whites.
College Graduate
College Graduate
College Graduate
College Graduate
College Graduate
College Graduate
Latino
Latino
Latino
College
Some College
College
Some College
College
Some College
White
White
School
High School
School
High School
School
High School
African‐American
White
African‐American
African‐American
African‐American
African‐American
African‐American
buffered against risk than
Family composition has mixed implications. On
do other households.
High
High
High
the one hand, two-adult households are much less

Some
Some
Some
likely to experience unmet needs when they face

no economic instability. On the other hand, among households experiencing
economic shocks,
No Shocks the gap inNonwealth Shocks
Any Shocks unmet needs between single- and
No Shocks multiple- adult
households is much smaller. This may partly reflect the higher baseline level of
unmet needs for single adults, but it suggests, at a minimum, that multiple adult
households are powerfully affected by shocks. This is in large part because
many of these shocks are transmitted through employment; multi-worker
households thus get doubly exposed to unemployment, benefit cuts and the
like, even though their dual-earner capacity also allows them to more readily
buffer some of these shocks.
The presence of children in the household yields a more consistent pattern.
Although households with children report modestly greater unmet needs
compared to childless households when there is no economic instability, both

differentials get strikingly larger when the households experience economic
shocks. The gap in unmet needs between households with children and without
children grows by 10 percentage points in the face of economic instability and
appears equally large whether the shocks involve wealth or other risk domains.
It remains unclear why households with children are less capable of coping
with economic uncertainty. Children themselves can be a source of unexpected
costs. In addition, adults in households with children may be constrained by
child care or other responsibilities, limiting their ability to adapt to shifting
work expectations, medical needs, or other changing circumstances.
Economic Insecurity through Americans’ Eyes

Insecurity has become a dominant motif in Americans’ economic lives.
Strikingly, however, no regularly funded national survey tracks even a small
share of the factors that shape Americans’ economic security.18 Drawing on a
unique two-wave survey that comprehensively examines these factors during
the recession (and allows comparison back to 2007), this report has painted a
broad portrait of how Americans perceive their economic security.
This portrait shows that Americans are standing on
shaky ground. During the recent downturn, few have
not been touched by economic uncertainties. Yet even
While less advantaged
before the recession, more than half of all Americans Americans and racial
expressed worries about their economic prospects. and ethnic minorities
As economic shocks have multiplied and instability
look substantially more
persisted, these worries have transformed into
broader and more persistent anxiety driven by vulnerable to economic
the widespread experience of economic loss. shocks, economic
To be sure, these shocks are not felt equally. uncertainties touch even
Americans differ in their exposure to economic those who are relatively
instability and, even more starkly, in their capacity well-off.
to cope with it. Less advantaged Americans and
racial and ethnic minorities look substantially more
vulnerable to economic shocks than do Americans as a whole—primarily
because their basic economic buffers are so weak. Households with children
appear more deeply affected, perhaps because the adults in these households
have less flexibility to adapt to changing economic circumstances.
Yet economic uncertainties touch even those who are relatively well-off:
About half of households with between $60,000 and $100,000 in annual income
who experienced persisting shocks to employment or medical costs reported
some unmet basic needs; almost 40 percent reported multiple unmet needs.
Altogether, somewhere between a quarter and a third of all Americans reported
unmet needs associated with economic shocks.

The SERPI assessed Americans’ experiences and perceptions of economic
insecurity in the depths of the recession, which might lead to the concern that
its findings are highly time-bound. Yet, as Figure 13 indicates, general poll data
suggest that 2009 was not particularly unusual.19
Worries about job loss did jump in 2009. By the summer of 2010, however, these
concerns had abated only modestly. The increase in reported worries during
the downturn was surprisingly modest for housing stability, in part because
Americans’ concerns were already high; nor did they decline much after 2009.
For wealth (adequate retirement savings) and medical costs, concerns were
high even before 2009 and have not diminished since. Americans have been
standing on shaky ground for some time, and the ground still seems extremely
unstable.
Tracking Public Concern About Some Aspects Of Economic Security
Tracking
Fig. Public Concern
13 Tracking About
Public Some
Concern Aspects
about Of Economic
Aspects of Economic Security
Security
PercentPercent
Very or Somewhat Worried, 2005
Percent Very or Somewhat Worried, 2005 to 2010
“Very” or “Somewhat” toto 2010
Worried, 2005 2010
90%
80%
70%
of Americans
Percentage of Americans
60%
50%
ge of
tage
40%
enta
en
30%
Perc
20%
10%
0%
Summer 2005 Summer 2007 Summer 2009 Summer 2010

Categories of Insecurity
Losing Job
Losing Job Losing Home
Losing Home Medical Costs
Medical Costs
Source: Kaiser Family Foundation, Kaiser Health Tracking Poll
Whether the ground on which Americans stand is more stable in the future
depends not just on the pace of economic recovery, but also on whether we
learn from their longstanding experiences with economic insecurity and work
to reduce its frequency, severity, and impact in the future.

Technical Appendix
This appendix describes in more detail the Survey of Economic Risk
Perceptions and Insecurity.
The SERPI was incorporated as a part of the 2008-2009 Panel Survey of the
American National Election Studies (ANES), a survey funded by the National
Science Foundation for the past half century. The Panel Survey was an on-line
survey of a nationally representative sample of Americans who agreed to be
interviewed monthly between January 2008 and October 2009. Thirteen of the
monthly waves were available to other researchers. With financial support from
the Rockefeller Foundation, the SERPI was fielded as the sole questions for the
panel in March (Wave 15) and September (Wave 21) of 2009.
The ANES panel was constructed to provide a representative sample of the
American population aged 18 and older as of November 4, 2008. Although not
all eligible panelists completed the two waves involved in the SERPI, all the
results reported below are weighted to replicate a nationally representative
distribution of respondents. Data collected on economic experiences,
perceptions, and expectations during these two waves were merged with socio-
demographic and other personal characteristics collected from respondents
in other waves of the ANES survey.
Measures of Economic Insecurity

To accurately assess the prevalence and consequences of insecurity, it was
essential to measure insecurity in a more complete manner than had been done
previously. At the same time, the SERPI was designed to allow comparison
of perceptions of insecurity measured prior to the economic downturn. In
the spring of 2007, the Rockefeller Foundation sponsored a survey under the
auspices of its New American Worker initiative that asked three thousand
Americans about their economic security. The core of this survey was a
question about “your family’s economic security” defined for respondents as
“being able to keep your job, maintain your income, have health insurance
coverage, and retire comfortably.” The survey also asked about concerns
related to more specific economic risks, including losing one’s job, facing large
out-of-pocket medical spending, and lacking adequate income to pay for a
comfortable and secure retirement.
To allow comparisons with this 2007 survey, the two waves of the SERPI
incorporated an identically worded set of questions about economic security
in general, as well as about some of the more specific forms of economic
risks asked about in the 2007 survey.20 However, the SERPI substantially
augmented these earlier questions. In the employment domain, the expanded
scope included questions about (1) losing one’s job (if currently employed), (2)
finding a job (if currently unemployed but still in the workforce), and (3) losing
several months from work due to serious illness. In the health domain, the

risks included (1) large out-of-pocket medical expenses, (2) losing insurance
coverage due to cost increases, (3) having coverage cut, (4) being unable to
determine what types of services were actually covered, and (5) future nursing
home costs. In the wealth domain, risks included (1) inadequate savings to
support an adequate retirement, (2) being unable to cover the costs of current
housing arrangements, (3) cuts in pension benefits, and (4) having debt so
large that it could never be paid off. Risks in the family domain included (1)
urgent financial assistance to members of one’s extended family, (2) losing one’s
partner/spouse due to divorce, and (3) losing one’s partner/spouse due to death.
To ensure comparability across surveys, the same response scale was used
as in the 2007 American Worker survey: respondents were asked if they were
very, fairly, somewhat, or not at all worried about each risk. Although framing
responses in terms of “worry” may mean that some respondents will be more
willing than others to express their concerns, past studies suggest that worry is
a reliable measure of concerns involving uncertain prospects.21
To assess the frequency with which these worries were realized, a matched
set of questions were asked about whether respondents had experienced the
corresponding unexpected events. For example, worries about employment
correspond with questions regarding whether any adults in the household had
lost their job. These negative events are described collectively in the report
as economic “shocks.” Respondents on the March 2009 SERPI were asked
about whether they had experienced specific shocks in the past year, those
responding on the September 2009 wave were asked if they had experienced
specific shocks in the past six months. For those completing both waves of
the survey, it is therefore possible to construct an 18-month history of their
experiences, ranging from March 2008 to September 2009.
Specifically, respondents were asked about two shocks in the employment
domain (whether any worker in the household had “been unemployed not by
personal choice” or had “lost more than a month from work due to serious illness
or injury”), four shocks related to medical expenses (whether they had “lost their
health insurance,” “had problems getting their insurance to pay for major medical
expenses,” “had out-of-pocket major medical expenses as the result of serious
illness or injury in their immediate family,” or “had to pay a lot more for their health
insurance than expected”), three shocks related to wealth (“had their retirement
benefits at work cut substantially,” “had the value of their investments or retirement
funds decline substantially,” or “had the value of their house decline substantially”)
and three shocks related to family (whether they had “spent a substantial sum
helping out their extended family,” “been divorced or separated from their spouse,”
or “had their spouse/partner pass away”).
Past research suggests that particular risks will feel more distressing if they
are relatively hard to anticipate or expected to have a relatively large impact
on household well-being.22 As part of the SERPI, respondents were asked, for a
subset of economic risks, to assess whether the events in question were “ones
that people can plan for, ones that come unexpectedly, or a mix of predictable

and unpredictable circumstances?” 23 And if those unfortunate events came
to pass, how long it might be, “for the typical person like yourself, before the
household’s financial situation returns to how it was before the event occurred.”
Buffers against Economic Risks

The extent to which economic uncertainty feels threatening depends in large
part on a household’s capacity to buffer financial shocks should they occur.
This in turn depends on the household’s savings and ability to tap into the equity
of its illiquid assets, balanced against the carrying costs for the household’s
debt.24 Beyond these household resources, risk can also be buffered by drawing
upon the financial resources inherent in broader family connections and social
networks.25
The value of households’ equity is difficult to assess with great reliability; the
liquidity of these assets is even more difficult to measure. The SERPI therefore
included indirect, but more readily answered, questions. These included: (1)
an estimate of how many weeks/months the household could last, without
hardship, if its current earnings vanished, (2) whether it had recently tapped
into the equity of retirement accounts in order to pay expenses, and (3) whether
the household had accumulated debt so substantial that the respondent
anticipated difficulty in being able to pay it off. To assess the availability of
financial resources through social networks, respondents were asked how
much they could borrow from “family members and close friends” in a time of
need.
Consequences of Economic Insecurity

High levels of insecurity may be consequential either because they cause
distress or because they interfere with households’ ability to meet other
basic needs. The SERPI measured distress through a combination of
questions regarding how frequently respondents reported thinking about
their households’ economic insecurity and the extent of anxiety that they
experienced when they did so. The SERPI measured households’ ability to meet
basic needs through a combination of questions regarding food security (had
members of the household gone hungry because there was not enough money
to pay for groceries), housing instability (losing one’s home through eviction
or inability to pay the mortgage), and unmet medical needs (not going to the
doctor for a known problem out of concern for costs).
Unlike the measures of psychological distress, which are directly attributed
by respondents to perceptions of economic insecurity, these measures of
unmet basic needs do not require households to attribute unmet needs to
specific causes. To assess their relationship with insecurity, therefore, requires
comparing unmet needs for households that report higher and lower levels
of perceived insecurity or experienced instability but that otherwise look
similar. In the text, this is done through comparison of households in similar
demographic groups (for example, the third income quartile). To ensure that

the higher levels of unmet need that are associated with reported economic
instability were not in fact a consequence of some other factor that occurred
in conjunction with economic instability, a set of multivariate regression
models that identified the association of unmet needs and economic shocks
was estimated. These models controlled statistically for the household’s annual
income in the year prior to the economic shocks; the value of its stock holdings;
household size, race and ethnicity; the educational attainment of the primary
respondent on the survey; and gender and age.
The results from these models revealed that while instability in all four
economic domains was associated with higher levels of unmet need for the
household, only for shocks associated with employment and medical expenses
was this relationship statistically significant, controlling for shocks in other
domains and the above-mentioned socio-economic characteristics of the
household. Conversely, all four buffers were associated with unmet needs in a
statistically significant manner, again controlling for the presence of economic
shocks and other socio-economic characteristics of the household. The
probability of unmet need was about half as large for persisting employment
shocks, compared with those that occurred but once in the previous 18 months;
for persisting shocks associated with medical expenses, the probability of
unmet need was twice as high as for non-reoccurring shocks.

Notes
1 Jacob Hacker, The Great Risk Shift: The New Economic Sheila D. Rustgi, Losing Ground: How The Loss of Adequate
Insecurity and the Decline of the American Dream, rev. Health Insurance Is Burdening Working Families (New
and exp. (New York: Oxford University Press, 2008); York: Commonwealth Fund, 2008); see also Peter J. Cun-
Peter Gosselin and Seth Zimmerman, Trends in Income ningham, “The Growing Financial Burden of Health Care:
Volatility and Risk, 1970–2004, Urban Institute Work- National and State Trends, 2001 – 2006,” Health Affairs 2,
ing Paper (Washington, DC: Urban Institute, May 2008); no.5 (2010):1037–1044; Changing distribution of wealth
Thomas Cusack, Torben Iversen, and Philipp Rehm, “Risks and its consequences for risk buffering was explored in
at Work: The Demand and Supply Sides of Government Karen E. Dynan and Donald L. Kohn, The Rise in U.S. House-
Redistribution,” Oxford Review Economic Policy 22, no. 3 hold Indebtedness: Causes and Consequences, Discussion
(2006):365–389; Philipp Rehm, “Risks and Redistribution: Paper, 2007-37, Finance and Economics Discussion Series
An Individual-Level Analysis,” Comparative Political Studies Divisions of Research & Statistics and Monetary Affairs
42, no. 7 (2009):855–881; Charles F. Manski, “Measuring Federal Reserve Board (Washington, DC, 2007); and Jona-
Expectations,” Econometrica 72, no. 5 (2004):1329–1376; J. than Gruber, “The Wealth of the Unemployed,” Industrial
Dominitz and C. Manski, “Perceptions of Economic Insecu- and Labor Relations Review 55, no. 1 (2001):79–94. Illustra-
rity: Evidence from the Survey of Economic Expectations,” tions of the impact of family configurations on economic
Public Opinion Quarterly 61 (1997):261–287. security was examined in Marianne E. Page and Ann Huff
Stevens, “The Economic Consequences of Absent Parents,”
2 The MetLife’s Study of the American Dream: Against the The Journal of Human Resources 39, no. 1 (2004):80–107;
Backdrop of the Financial Burden Shift (New York, NY: Met- and Paul Attewell, “The Impact of Family on Job Displace-
ropolitan Life Insurance Company, 2007). Families USA, ment and Recovery,” Annals of the American Academy of
“Too Great A Burden: America’s Families at Risk,” Publica- Political and Social Science 562 (1999):66–82.
tion No. 07-113 (Washington, DC: Families USA Foundation,
2007); Kaiser Family Foundation, Health Security Watch 5 Although not all eligible panelists completed the two
(Menlo Park, CA;: Kaiser Family Foundation, 2007); Paul waves involved in the SERPI, all the findings reported are
Fronstin, “Savings Needed to Fund Health Insurance and weighted to produce nationally representative results.
Health Care Expenses in Retirement,” EBRI Issue Brief no. Of the 3,657 active panelists in March 2009, 2,493 (68.2
295 (Employee Benefit Research Institute, percent of the eligibles) completed the survey; of the 2,527
July 2006). One exception to these more narrowly focused active panelists in September 2009, 2,203 (62.5 percent
surveys was a survey to which we will return later in the of the eligibles) completed the survey. A total of 2,084
report: The Rockefeller Foundation, American Worker respondents completed both waves of the survey.
Survey (New York: Rockefeller Foundation, 2007) [fielded
by Yankelovich Inc, February 6-19, 2007]. 6 “Economic security” was defined as “being able to keep
your job, maintain your income, have health insurance
3 Lars Osberg and Andrew Sharpe, “How Should We coverage, and retire comfortably.”
Measure the Economic Aspects of Well-Being,” Review of
Income and Wealth 51, no. 2 (2005):311–336; E. Ligon and L. 7 Not every respondent was asked about all of these
Schechter, “Measuring Vulnerability,” Economic Journal 113, risks: those who were retired were not asked about losing
no. 486 (2003):C95–C102. their job; those who had no younger children were not
asked about the costs of child care or education; those
4 There is an extensive literature relating each of these who had no health insurance were not asked about the
domains to instability of economic circumstances and risk of unexpected premium increases or otherwise losing
(less extensively) to perceptions of economic insecurity. insurance coverage.
For some illustrative examples: Links between unemploy-
ment and subsequent earnings trajectories and perceived 8 Worry is a generally robust metric for assessing inse-
insecurity were explored in Dominitz and Manski, “Per- curity. See Louie Rivers and Joseph Arvai, “Win Some, Lose
ceptions of Economic Insecurity;” and Liliana Winkelman Some: The Effect of Chronic Losses on Decision Making
and Ranier Winkelman, “Why Are the Unemployed So Under Risk,” Journal of Risk Research 10, no. 8 (2007):1085–
Unhappy? Evidence from Panel Data,” Economica 65 1099; V. Ricciardi, “The Financial Psychology of Worry and
(1998):1–15. The consequences of medical expenditures on Women,” Social Science Research Network (SSRN) Working
economic security were documented most extensively Paper Series, 2008. [(http://papers.ssrn.com/sol3/papers.
in Sara R. Collins, Jennifer L. Kriss, Michelle M. Doty, and cfm?abstract_id=1093351].

9 Collins, Kriss, Doty, and Rustgi, Losing Ground; Families equity of retirement accounts in order to pay expenses,
USA, Too Great a Burden; Kaiser Family Foundation, Health and (c) whether the household had accumulated debt
Security Watch. so substantial that the respondent anticipated difficulty
in being able to pay it off. To assess the availability of
10 Jennifer Lerner and Dacher Keltner, “Fear, Anger and financial resources through social networks, respondents
Risk,” Journal of Personality and Social Psychology 81, no. 1 were asked how much they could borrow from “family
(2001):146-159; Jennifer Lerner, Roxana Gonzalez, Deborah members and close friends” in a time of need. Because
Small, and Baruch Fischhoff, “Effects of Fear and Anger the aggregate distribution of responses was very similar
on Perceived Risks of Terrorism: A Natural Experiment,” across the two waves of the survey, only the fall results
Psychological Science 14, no.2 (2003):144–150. are presented here. As noted above, because the stock
market had rallied somewhat by the fall of 2009 and
11 Comparing expectations between people who have some aspects of the national economy were at least tem-
actually experienced these events and those who have porarily appearing a bit more robust, these fall estimates
not, it appears that those who are subject to an economic are slightly more optimistic about the capacity of risk
shock are more pessimistic about the duration of their buffers than would be the estimated based on the spring
impact, perhaps reflecting greater awareness of the survey data.
actual consequences or greater anxiety based on prior
experience. 17 Lauren J. Krivo and Robert L. Kaufman, “Housing
and Wealth Inequality: Racial-Ethnic Differences in
12 Talya Miron-Shatz, “Am I Going To Be Happy And Home Equity in the United States,” Demography 41,
Financially Stable?” How American Women Feel When no. 3 (2004):585–605; N. Anders Klevmarken, Joseph P.
They Think About Financial Security,” Judgment and Lupton, and Frank P. Stafford, “Wealth Dynamics in the
Decision Making 4, no. 1 (2009):102–112. 1980s and 1990s: Sweden and the United States,” The
Journal of Human Resources 38, no. 2 (2003): 322–353;
13 The literature on the linkage between stress, anxiety Michael Hurd and Arie Kapteyn, “Health, Wealth, and the
and health is vast. See, for example, Terrence D. Hill, Cath- Role of Institutions,” The Journal of Human Resources
erine E. Ross, and Ronald J. Angel, “Neighborhood Disorder, 38, no. 2 (2003):386–415; Seymour Spilerman,“Wealth
Psychophysiological Distress, and Health,” Journal of and Stratification Processes,” Annual Review of Sociol-
Health and Social Behavior 46, no. 2 (2005):170–186, and ogy 26 (2000):497–524; Lisa A. Keister and Stephanie
E. B. Faragher, M. Cass, and C. L. Cooper, “The Relationship Moller,“Wealth Inequality in the United States,” Annual
between Job Satisfaction and Health: A Meta-Analysis,” Review of Sociology 26 (2000):63–81.
Occupational and Environmental Medicine 62, no. 2
(2005):105–112. 18 The Health Security poll that has been fielded by the
Kaiser Family Foundation since 2004 incorporates a broad
14 Most commonly, this involves not going to the doctor array of questions about Americans worries related to
for needed care because the respondent was concerned medical expenses, as well as a few non-medical sources of
about the potential costs of that visit. economic insecurity. But it is not sufficiently comprehen-
sive regarding the latter and collects no information at all
15 There is one exception to this general pattern. When about experienced economic shocks, risk buffers, or other
there are multiple shocks in the family domain (most of- attributes of the household essential for understanding
ten, when the loss of a partner/spouse coincides with the how it is coping with economic uncertainty.
need for financial assistance from one’s extended family),
the level of unmet need is more than twice as high as for 19 Kaiser Family Foundation, Kaiser Health Tracking Poll:
households that experience a single family-related shock. July 2010. Publication No. 8084-T (Menlo Park, CA: Kaiser
Multiple shocks in the family domain seemingly induce Family Foundation).
more unmet needs than for multiple shocks in any other
domain of economic life. 20 In some cases the wording of the items from the
American Worker Survey was altered to more effectively
16 The value of households’ equity is difficult to assess measure the risks in question. For example, the 2007
with great reliability; the liquidity of these assets is even survey asked about concerns about providing one’s
more difficult to measure. The SERPI therefore included parents with financial assistance, whereas the two
indirect, but more readily answered, questions. These 2009 waves broadened the wording to include financial
included: (a) an estimate of how many weeks/months the assistance for all members of one’s extended family. Of
household could last without hardship if its current earn- the 15 specific risks identified in the text above, 7 retained
ings vanished, (b) whether it had recently tapped into the identical wording between the 2007 and 2009 versions.

21 C. F. Manski, “Measuring Expectations;” Louie Rivers
and Joseph Arvai, “Win Some, Lose Some: The Effect of
Chronic Losses on Decision Making Under Risk,” Journal
of Risk Research 10, no. 8 (2007):1085–1099; V. Ricciardi,
“The Financial Psychology of Worry and Women,” Social
Science Research Network (SSRN) Working Paper Series,
2008. [http://papers.ssrn.com/sol3/papers.cfm?abstract_
id=1093351]. To test the reliability of the worry measure,
for a subset of a half dozen risks the SERPI also included
an alternative method for measuring concern in terms
of the frequency with which people reported thinking
about the risk in emotionally charged terms. (For a
rationale for this alternative method, see Talya Miron-
Shatz, “Am I Going To Be Happy and Financially Stable?”
Although there was some variation across the type of
risk, the worry measures captured about 85-90% of those
who reported that they were fretting about these risks
(that is, thinking about them often in ways that evoked
strong negative emotions).
22 L. Osberg and A. Sharpe, “How Should We Measure

the ‘Economic’ Aspects of Well-Being;” C.F. Manski,
“Measuring Expectations”; Carol Graham and Stefano
Pettinato, Happiness and Hardship: Opportunity and
Insecurity in New Market Economies (Washington, DC:
The Brookings Institution Press, 2002); Paul Slovic,
“Trust, Emotion, Sex, Politics and Science: Surveying
the Risk-Assessment Battlefield,” Risk Analysis 19, no. 4
(1999):689–702.
23 Two risks were assessed in each of the four domains

that were the focus of the SERPI: For employment, the
risk of being laid-off or becoming disabled; for medical
costs the risk of large out-of-pocket medical expenses or
of losing one’s health insurance; for wealth, the risk of
having insufficient income during retirement or of losing
one’s home; and for family, the risk of divorce or having
a member of one’s extended family require substantial
financial assistance.
24 Austin Nichols and Melissa M. Favreault, The

Impact of Changing Earnings Volatility on Retirement
Wealth (Washington, DC: Urban Institute, 2009);
Christopher D. Carroll, Karen E. Dynan, and Spencer D.
Krane, “Unemployment Risk and Precautionary Wealth:
Evidence from Households’ Balance Sheets,” The Review
of Economics and Statistics 85, no.3 (2003):586–604.
25 Samuel Bentolila and Andrea Ichino, “Unemployment

and Consumption Near and Far Away from the
Mediterranean,” Journal of Population Economics 21,
no. 2 (2008):255–280; R. Schoeni, “Does Unemployment
Insurance Displace Familial Assistance?” Public Choice 110,
no. 1–2(2002):99–119.

About the Economic Security Index Research Team
Jacob S. Hacker (Ph.D., Yale University) is Stanley Resor Professor of Political Science at
Yale University, where he is also a Resident Fellow of the Center for the Study of American
Politics and the Institution for Social and Policy Studies. An expert on the politics of U.S.
health and social policy in cross-national perspective, he is the author of five books, numer-
ous journal articles, and a wide range of popular writings on American politics and public
policy, with a focus on health and economic security.
Gregory Huber (Ph.D., Princeton University) is Associate Professor of Political Science at

Yale University and a Resident Fellow of the Institution for Social and Policy Studies and the
Center for the Study of American Politics. Prior to coming to Yale, he held the Robert Hartley
Fellowship in Governmental Studies at the Brookings Institution. His research, which has
been funded by the National Science Foundation, has appeared in the American Political
Science Review, Quarterly Journal of Political Science, American Journal of Political Science, and
Journal of Law, Economics, and Organization. His is also the author of The Craft of Bureaucrat-
ic Neutrality (Cambridge University Press, 2007), which examines the conditions under which
external political actors are able to influence how bureaucratic agencies enforce the law.
Philipp Rehm (Ph.D., Duke University) is Assistant Professor of Political Science at Ohio
State University; previous posts include the Postdoctoral Prize Research Fellowship at Nuff-
ield College, Oxford University. His work is located at the intersection of political economy
and political behavior. In particular, he is interested in the causes and consequences of in-
come dynamics (such as income loss, income volatility, and risk exposure). At the micro-level,
his research explores how income dynamics shape individual preferences for redistribution,
social policies, and parties. At the macro-level, his work analyzes the impact of labor market
and income dynamics on polarization, electoral majorities, and coalitions underpinning
social policy.
Mark Schlesinger (Ph.D., University of Wisconsin) is Professor of Health Policy and a Fellow
of the Institution for Social and Policy Studies at Yale University and the most recent past
editor of the Journal of Health Policy, Politics and Law. His research explores the determinants
of public opinion about health and social policy, the influence of bounded rationality on
medical consumers, and the role of nonprofit organizations in American medicine. He has
consulted to a half dozen federal agencies, several dozen state and local governments, and
more than a score of nonprofit organizations.
ESIIndex
Economic Security Index
Future Reports
Reports
Who Are America’s Insecure?
Results from the Economic Security Index
Medical Care as a Threat to American Economic Security
Wealth, Debt, and American Economic Security
The Causes, Severity, and Persistence of Family Income Losses
American Economic Security in Cross-National Perspective
www.economicsecurityindex.org
With support from The Rockefeller Foundation

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ESI Economic Security Index

With support from The Rockefeller Foundation

The Economic Security Index (ESI), developed by political scientist 

The ESI is part of the “Campaign for American Workers” initiative of

 Henry Aaron (Brookings Institution)

 Henry Farber (Princeton University)

 Robert Greenstein (PrESIdent, Center on Budget and Policy Priorities)

 Larry Mishel (Director, Economic Policy Institute)

 Alicia Munnell (Director, Boston College Center on Retirement Research)

 Robert Solow (Nobel Prize in Economics, 1987)

Collectively termed the Survey of Economic Risk Perceptions and Insecurity

standing on shaky ground 1

2 economic security project

standing on shaky ground 3

The Survey of Economic Risk Perceptions and Insecurity

The SERPI in Brief

4 economic security project

Ensuring Comparable, Accurate Measures of Perceptions

standing on shaky ground 5

Americans’ Experiences of Economic Insecurity

Economic Instability Touches Almost Every American

6 economic security project

40% 40% 40%

Household Wealth Medical Costs

index, an integrated measure of economic security based on publicly available

Economic Shocks Often Persist over Time

standing on shaky ground 7

Multiple Shocks Are Common

Fig. 3 Persisting Shocks across Domains

8 economic security project

16.4% 16.4% 30%

6.2% 6.2% 20% 30%

standing on shaky ground 9

What Sources of Economic Instability Cause the Most Worry?

Employment Family Wealth Health

Perhaps the most surprising finding is the prevalence of worries related

10 economic security project

Are Americans’ Worries Reasonable?

standing on shaky ground 11

Substantial Anxiety about Economic Insecurity

12 economic security project

The Impact of Insecurity on Economic Well-Being

Economic Shocks Are Associated with Unmet Needs

standing on shaky ground 13

Shocks to wealth and family are associated with aMultiple Unmet Needs

Are the Effects of Insecurity Distinct from Economic Disadvantage?

14 economic security project

Lowest Income Quartile Second Quartile Third Income Quartile Highest Income Q

standing on shaky ground 15

Fig. 9 How Long Can Household Go without Income

16 economic security project

Why Household Buffers

The Uneven Experience of Economic Insecurity

standing on shaky ground 17

The Surprising Commonality of Economic Instability

Fig. 10 Shocks and Worries by Sociodemographic Groups

Persisting Shocks 10%

White African‐American Latino Child D

White African‐American Latino

18 economic security project

60% Child Dependents

The Economic Security Index (ESI), developed by political scientist

Henry Aaron (Brookings Institution)

Henry Farber (Princeton University)

Robert Greenstein (PrESIdent, Center on Budget and Policy Priorities)

Larry Mishel (Director, Economic Policy Institute)

Alicia Munnell (Director, Boston College Center on Retirement Research)

Robert Solow (Nobel Prize in Economics, 1987)