Association for Public Policy Analysis & Management

This paper develops a conceptual framework for examining economic instability in low-income family life for the purposes of policy analysis, program evaluation, and policy design. Frequent changes across many areas of life mark the day-to-day reality of low-income Americans (Ackerman et al., 1999; Wachs and Evans, 2010).  Economic change can benefit families if accompanied by income gains or social mobility, but mobility has remained stagnant since the late 1970’s for most working Americans (Hacker and Jacobs, 2008). For low-income families in particular, the documented increases of earnings and income volatility in recent decades are consistent with evidence of unpredictable employment and work schedules (Hollister, 2011; Hollister and Smith, 2014), fluctuating public benefits (Lambert and Henly, 2013; Ben-Ishai, 2015), changes in romantic relationships and household composition (Cherlin, 2010), and unwanted housing and neighborhood churning (Desmond, Gershenson and Kiviat, 2015). Taken together, these sources and responses to economic instability are likely to cause stress and material hardship, and to disrupt parenting and other family processes.

While research in multiple disciplines has examined various aspects of family, work, and income volatility, there has been no attempt to bring these strands of literature together conceptually or empirically.  A conceptual framework on economy instability is particularly necessary in order to relate this concept to how policy may enhance or curtail stability, and to the design and implementation of future policy. For instance, what is the difference between income mobility and income instability?  What changes to employment, family structure, or public benefits lead to income growth versus instability?

We advance the thinking on this topic in three ways: First, we reconcile and distinguish the concepts of income variability, volatility, instability, mobility and security.  Second, we provide a typology of income change, which helps to distinguish change that is likely to be beneficial from change that is likely to be disruptive and harmful.  Third, we consider how the most likely causes of changes in income—employment, family structure, and public benefit volatility—are specifically related to these different concepts and types.  This paper contributes to current thinking on the conceptualization of economic instability, provides a roadmap for hypothesis generation in future research, and helps policy researchers and policy makers consider economic instability more explicitly in the analysis, design, and evaluation of social policy.