On Shaky Ground? Income Instability and Economic Insecurity in Europe
Over the past few decades, economies and technologies have changed in ways that have
made people’s economic prospects more insecure. While non-standard work and digital
transformation have created opportunities for many, they have also exposed individuals
to fluctuations in their incomes, known as "income instability", as have major recent
shocks. Recognising that individuals’ jobs and circumstances can change multiple times
in a year, this report uses novel techniques to identify who is most exposed to income
instability in European OECD countries and examines the effects it has on their lives,
social mobility, and inequality. Income instability can be difficult to manage for
individuals who lack the financial resources to smooth their incomes. In this report,
people facing the twin problems of exposure and vulnerability to income instability
are considered to be economically insecure. Economic insecurity falls predominantly
on people with weak attachments to the labour force and on those who are not well-placed
to leverage the benefits of digitalisation. People at risk of economic insecurity
are more likely to worry about losing their jobs in the future than economically secure
individuals and, as shown in other research, experience poor health, food insecurity,
and poor childhood development outcomes, which can impede social mobility. Finally,
the report reviews a range of policies to improve the timeliness of social protection
to better support people with highly unstable incomes and explores options to help
those most at risk of economic insecurity build financial buffers.
Published on December 12, 2023Also available in: French