A relative measure of Economic Insecurity and Job Turnover

Abstract

Economic inequalities and poverty are aspects of well-being that have been largely studied in the past literature also with the development of many appropriate indicators able to measure them. One aspect of well-being that has not been studied enough is economic insecurity. This lack might be due to its abstract nature and the difficulty to define such phenomena. In this work, we suggest an indicator to measure the individual feeling of economic insecurity by considering past resource fluctuations, the Logarithmic Relative Indicator (LRI). The innovation of this indicator consists in considering the past resource fluctuations from a relative point of view, allowing individuals to evaluate each fluctuation based on the level of their previous resources. We then use the indicator proposed to study how economic insecurity may affect the job changes. We found that economic insecurity has a significant impact on the probability of changing job and that the LRI outperform other indicators of economic insecurity in this application.