The role of uncertainty in forecasting employment by skill and industry

Sakutukwa, Tutsirai; Yang, Hyung-Sik

doi:10.1080/13504851.2017.1418069

Cited by 4 publications

(3 citation statements)

References 11 publications

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“…Similarly, Sorić and Lolić (2017) computed several uncertainty proxies for the Croatian economy and found that a vast part of the analysed indicators were significant predictors of economic activity. In the case of employment, Sakutukwa and Yang (2018) found that macroeconomic uncertainty contained useful information to forecast employment, especially in the construction and manufacturing industries. These results are in line with those obtained by for unemployment rates.…”

Section: Resultsmentioning

confidence: 99%

Uncertainty indicators based on expectations of business and consumer surveys

Clavería

2020

Empirica

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In this study we evaluate the dynamic response of different macroeconomic variables to shocks in agents' perception of three dimensions of uncertainty (economic, inflation and employment). First, we apply a geometric indicator to compute the proportion of disagreement in business and consumer expectations of eight European countries and the Euro Area. Next, we use a bivariate vector autoregressive framework to estimate the impulse response functions to innovations in disagreement. While we find an adverse reaction in unemployment rates to shocks in discrepancy, results differ markedly between disagreement in business and in consumer surveys with regard to economic growth and inflation: shocks to manufacturing production discrepancy lead to a decrease in economic activity, as opposed to shocks to consumer economic discrepancy; and the opposite in the case of a shock in the perception of price uncertainty. Finally, we perform a forecasting exercise to assess the predictive performance of the disagreement indicators for different time horizons, obtaining more accurate out-of-sample recursive forecasts of economic growth with the indicators of discrepancy of manufacturing firms and, of unemployment with the indicators of consumer discrepancy. When compared to recursive autoregressive predictions used as a benchmark, we find that vector autoregressions with industry discrepancy tend to outperform the benchmark in more cases that models with indicators of consumer discrepancy.

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Section: Resultsmentioning

confidence: 99%

Uncertainty indicators based on expectations of business and consumer surveys

Clavería

2020

Empirica

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“…Claveria, Monte, and Torra (2017) and Lahiri and Zhao (2015) link quantified survey expectations to quantitative realizations and obtain a significant improvement in accuracy during periods of uncertainty with high levels of disagreement between respondents. Sakutukwa and Yang (2018) find that uncertainty measures contain useful information to improve short-term forecasts of employment. These results have led us to devise a geometric framework that allows to measure uncertainty as the percentage of disagreement among survey respondents incorporating the information coming from the neutral responses.…”

Section: Introductionmentioning

confidence: 94%

A new consensus-based unemployment indicator

Clavería

2018

Applied Economics Letters

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In this study we present a novel approach to measure the level of consensus among agents' expectations. The proposed framework allows us to design a positional indicator that gives the percentage of agreement between survey expectations. While other aggregation methods such as the balance, which is constructed as the difference between the percentages of respondents giving positive and negative replies, explicitly omit the neutral information, the proposed metric allows synthesizing the information coming from all response categories, including the percentage of respondents who do not expect any change. In order to assess the performance of the proposed measure of consensus, we compare its ability to track the evolution of unemployment to that of the balance in eight European countries. With this aim, we scale both measures to generate oneperiod ahead forecasts of the unemployment rate. We find that the consensus-based unemployment indicator outperforms the balance in all countries except Denmark and Sweden, which suggests that the level of agreement among agents' expectations is a good predictor of unemployment.

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“…Macroeconomic forecasts are normally obtained from time series data (Wilke, 2018). However, some studies have used rolling regressions to conduct a simulated out-of-sample forecasting exercise to forecast employment (Sakutukwa & Yang, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

Modeling and forecasting the effect of COVID-19 in the Ecuadorian labor system

Flores¹,

Vera-Alcívar²,

Tonon-Ordóñez³

2022

Podium

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COVID-19 has caused massive disruption at different levels. Scholars around the world have produced a significant number of studies to understand, reduce and predict the effects of this pandemic. Prediction models are crucial at this time of uncertainty, and labor indicators are key macroeconomic variables to plan the recovery of the effects of COVID-19. This study aims to model and predict the trend of the Ecuadorian labor system. The statistical analysis model applied for this study was the X-13ARIMA to predict the behavior of four indicators of the Ecuadorian labor system and establish their natural tendency by isolating the COVID-19 variable and determining the quantitative impact of the pandemic. The results show that the labor system was greatly affected by the COVID-19 outbreak; however, a deterioration was already observed in full employment and expanded underemployment. The study concludes that the pandemic altered the seasonality of the labor indicators.

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The role of uncertainty in forecasting employment by skill and industry

Cited by 4 publications

References 11 publications

Uncertainty indicators based on expectations of business and consumer surveys

Uncertainty indicators based on expectations of business and consumer surveys

A new consensus-based unemployment indicator

Modeling and forecasting the effect of COVID-19 in the Ecuadorian labor system

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