A pervasive sense of insecurity

Israelis are experiencing profound anxiety over their ability to secure a stable income and a decent standard of living.

Israelis take part in a demonstration against austerity measures in Tel Aviv in 2013 (photo credit: REUTERS)
Israelis take part in a demonstration against austerity measures in Tel Aviv in 2013
(photo credit: REUTERS)
PERSISTENT FEAR of job loss, concern over being able to make ends meet, and anxiety over post-retirement savings are common among a sizable segment of Israel’s citizens. But Israelis are not alone. More than merely feeling that “life these days is not simple,” citizens of many countries are experiencing profound economic anxiety regarding their ability to secure a stable income and ensure a good standard of living for their children.
The most obvious reason for this is the global economic crisis.
Mass layoffs, erosion of savings, and the near-bankruptcy of countries such as Greece, Ireland and Portugal became harsh realities, imperiling many people’s livelihoods and their country’s ability to provide them with a safety net.
Yet even before the crisis occurred, studies had found evidence of growing economic anxiety resulting from globalization. The opening of local markets to foreign trade and investment exposed citizens to the vagaries of the international markets, and at the same time made it difficult for countries to provide social safety nets. In addition, the need to keep local producers competitive increased the pressure to reduce expenses and chip away at workers’ conditions.
Trends of knowledge-driven technological change further contributed to the widening of gaps between skilled and unskilled workers.
Meanwhile, the anxieties of those “left behind” with stagnating incomes and reduced employment prospects have only deepened.
These trends help explain social and political shifts in recent years, such as the social justice protests that took place in Israel in 2011. They also shed light on the seemingly surprising popularity of US presidential candidates Donald Trump on the Right and Bernie Sanders on the Left, who appear to offer solutions – real or imaginary – to the economic insecurities of millions of people.
Israel has not escaped these trends.
Data from a new poll conducted by the Guttman Center for Public Opinion and Policy Research at the Jerusalem–based Israel Democracy Institute shows that a third of Israeli respondents fear they will not be able to live with dignity in old age, and more than half of the survey-takers are worried about their children’s financial wellbeing: 28 percent say they are very concerned over their future ability to support their children, while 32 percent say that they are somewhat concerned. Approximately one in five employees fear losing their jobs in the next year, while among self-employed people and freelancers the fear of unemployment is even greater, at 27 percent.
While a majority of respondents describe their situation as “good” or at least reasonable, the statistics reported here indicate that economic insecurity, and all its attendant aspects, is a widespread concern.
What are the implications of these findings? The answer, in part, has to do with the factors linked to economic insecurity. Our econometric analysis of the survey data cited above revealed the relative weakness of indicators widely considered to contribute toward economic security: defined-benefits, pensions, union membership and even job tenure, all turned out to have a weak, and at times even a negative correlation to the sense of personal economic security. Findings pertaining to income were also surprising: While income level and self-perceived economic security have a positive correlation, the effect is significant only with respect to income that is much higher than the national average. In other words, we found no clear correlation between income and sense of economic security at average, or even slightly above average, income levels.
However, if there is one factor that has a strong empirical connection to lower anxiety over one’s economic situation, it is level of education.
In particular, those with a college education were less fearful of their financial prospects than those without one, even when accounting for other related factors such as income. This finding emphasizes the importance of government investment in improving access and quality of education to all, so as to enhance people’s skills and employability. The key must be to improve workers’ employment prospects in the continuously evolving labor market.
Further, these statistics indicate that there is real need for ongoing and methodical measurement of different facets of citizens’ sense of economic security. These indicators should be taken seriously when debating government economic and social policies.
Countries across the globe are increasingly beginning to understand that the public’s sense of economic security should be an important consideration when setting policy goals. Israel would be wise to adopt this approach sooner rather than later. 
Prof. Yotam Margalit is an associate professor of political economy in the Political Science Department at Tel-Aviv University. Prof. Yuval Feldman is a professor of law and behavioral economy at Bar-Ilan University. Both are senior research fellows at the Israel Democracy Institute