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Adverse Shocks and Economic Insecurity: Evidence from C hile and M exico
Author(s) -
Espinosa Javier,
Friedman Jorge,
Yevenes Carlos
Publication year - 2014
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/roiw.12052
Subject(s) - latin americans , multinomial logistic regression , economics , demographic economics , socioeconomic status , development economics , demography , political science , sociology , population , machine learning , computer science , law
This paper uses multinomial logit to analyze economic insecurity for C hile and M exico from household surveys. It analyzes the effect changes in well‐being, age, health, wealth, employment status, gender, and education have on economic insecurity. The results show that the most significant variable is current exposure to adverse events, the second most significant is age, and the third is health. The current exposure to adverse events produces great anxiety and concern about and the inability to recover from these bad events. Older households assign higher probabilities to negative prospects and are thus subject to higher levels of economic insecurity. This also occurs when the household head is seriously ill. The effect of gender and wealth on negative expectations is very small, while education only affects M exico, and self‐employment affects only C hile. Finally, the similarities between C hile and M exico provide evidence of identifiable patterns for economic insecurity in Latin American countries.