Abstract

We want to develop an uncertainty index similar to the IAB Labor Market Barometer. The index will be based on high-frequency panel data from individuals and will contain objective and subjective measures of employment uncertainty that capture not only the current level of uncertainty but also expected future uncertainty. The index would be the first of its kind in Germany. Although there are established items for the underlying components of uncertainty (poverty, temporary employment, unemployment, etc.), but no index measures multidimensional uncertainty at higher frequencies over longer periods of time. (1) The index can be used to assess the effectiveness of current policy measures (existence of a pre-measurement) and to support the development of new policy measures to reduce economic uncertainty, such as social safety nets and employment initiatives. (2) An uncertainty index would enable more accurate identification of vulnerable population groups. In addition to the usual group differences (age, education, gender, region, etc.), some of which can also be found in official statistics, OPAL can be used to identify more detailed influencing factors at the individual level. (3) Although the basic idea behind the insecurity index is to measure insecurity in the labor market, it should also include items that are suitable for unemployed persons and can be used, for example, to evaluate SGB II reforms or to monitor general economic and social developments.