Unemployment expectations: A socio-demographic analysis of the effect of news

Sorić, Petar; Lolić, Ivana; Clavería, Oscar; Monte, Enric; Porras, Salvador Torra

doi:10.1016/j.labeco.2019.06.002

Cited by 20 publications

(13 citation statements)

References 98 publications

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“…The lowest forecast errors are obtained for the households within the first quartile regarding income (RE1), the respondents with secondary education (ED2) and the unemployed (PR0). These results are in line with those obtained by Sorić et al (2019), who found that unemployed respondents' expectations were most accurate that those obtained by employed respondents. Behavioural economics offers a plausible explanation for this pattern through the "availability heuristic" (Kahneman and Tversky, 1974).…”

Section: Fig 2 Histogram With Mean Frequency For Each Survey Variablesupporting

confidence: 91%

Economic Determinants of Employment Sentiment: A Socio-Demographic Analysis for the Euro Area

Clavería

Lolić²,

Monte

et al. 2020

SSRN Journal

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In this study we construct quarterly consumer confidence indicators of unemployment for the euro area using as input the consumer expectations for sixteen socio-demographic groups elicited from the Joint Harmonised EU Consumer Survey. First, we use symbolic regressions to link unemployment rates to qualitative expectations about a wide range of economic variables. By means of genetic programming we obtain the combination of expectations that best tracks the evolution of unemployment for each group of consumers. Second, we test the out-of-sample forecasting performance of the evolved expressions. Third, we use a state-space model with timevarying parameters to identify the main macroeconomic drivers of unemployment confidence and to evaluate whether the strength of the interplay between variables varies across the economic cycle. We analyse the differences across groups, obtaining better forecasts for respondents comprised in the first quartile with regards to the income of the household and respondents with at least secondary education. We also find that the questions regarding expected major purchases over the next 12 months and savings at present are by far, the variables that most frequently appear in the evolved expressions, hinting at their predictive potential to track the evolution of unemployment. For the economically deprived consumers, the confidence indicator seems to evolve independently of the macroeconomy. This finding is rather consistent throughout the economic cycle, with the exception of stock market returns, which governed unemployment confidence in the pre-crisis period.

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Section: Fig 2 Histogram With Mean Frequency For Each Survey Variablesupporting

confidence: 91%

Economic Determinants of Employment Sentiment: A Socio-Demographic Analysis for the Euro Area

Clavería

Lolić²,

Monte

et al. 2020

SSRN Journal

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“…Similarly, Juhro and Iyke (2019) showed that accounting for consumer and business sentiments improved forecast accuracy of consumption in Indonesia. Gayer, and Reuter (2015) and Sorić et al (2019) obtained similar results for the EA. Claveria, Monte and Torra (2017a,b;2018, 2019a have used the survey expectations from the World Economic Survey carried out by the Ifo Institute to show their good forecasting performance when used to construct economic indicators.…”

Section: Cons11mentioning

confidence: 54%

Spectral Analysis of Business and Consumer Survey Data

2020

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The Research Institute of Applied Economics (IREA) in Barcelona was founded in 2005, as a research institute in applied economics. Three consolidated research groups make up the institute: AQR, RISK and GiM, and a large number of members are involved in the Institute. IREA focuses on four priority lines of investigation: (i) the quantitative study of regional and urban economic activity and analysis of regional and local economic policies, (ii) study of public economic activity in markets, particularly in the fields of empirical evaluation of privatization, the regulation and competition in the markets of public services using state of industrial economy, (iii) risk analysis in finance and insurance, and (iv) the development of micro and macro econometrics applied for the analysis of economic activity, particularly for quantitative evaluation of public policies. IREA Working Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. For that reason, IREA Working Papers may not be reproduced or distributed without the written consent of the author. A revised version may be available directly from the author. Any opinions expressed here are those of the author(s) and not those of IREA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions.

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“…Against this backdrop, the analysis of unemployment expectations and uncertainty seems more timely than ever before. Despite the existence of a huge and growing literature on the impact of economic uncertainty on activity (Baker et al 2016;Carriero et al 2018;Ghirelli et al 2021;Škrabić Perić and Sorić 2018), its impact on unemployment has been somehow relegated to the background, in a similar way to unemployment expectations (Abberger 2007;Sorić et al 2019). Some exceptions are the works of Caggiano et al (2014Caggiano et al ( , 2017, Choi and Loungani (2015), Netšunajev and Glass (2017) and Nodari (2014), which empirically confirm the contribution of economic uncertainty shocks to the volatility of unemployment, especially during recessions.…”

Section: Introductionmentioning

confidence: 98%

Employment Uncertainty a Year after the Irruption of the COVID-19 Pandemic

Sorić

Clavería

2021

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This paper examines the evolution of consumer uncertainty about unemployment one year after the irruption of the covid-19 pandemic in European countries. Since uncertainty is not directly observable, we use two alternative methods to directly approximate it. Both approaches are based on qualitative expectations elicited form the consumer survey conducted by the European Commission. On the one hand, following Dibiasi and Iselin ( 2019), we use the share of consumers unable to formalize expectations about unemployment (Knightian-type uncertainty). On the other hand, we use the geometric discrepancy indicator proposed by Claveria et al. (2019) to quantify the proportion of disagreement in business and consumer expectations. We have used information from 22 European countries. We find that both uncertainty measures covary. Although we observe marked differences across countries, in most cases the perception of employment uncertainty peaked before the outbreak of the crisis, plummeted during the first months of the lockdown, and started rising again since the past few months. When testing for cointegration with the unemployment rate, we find that the discrepancy indicator exhibits a long-term relationship with unemployment in most countries, while the Knightian uncertainty indicator shows a purely short-run relationship. The impact of both indicators on unemployment is characterised by considerable asymmetries, showing a more intense reaction to decreases in the level of uncertainty. While this finding may seem counterintuitive at first sight, it somehow reflects the fact that during recessive periods, the level of disagreement in the employment expectations of consumers drops considerably.

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Unemployment expectations: A socio-demographic analysis of the effect of news

Cited by 20 publications

References 98 publications

Economic Determinants of Employment Sentiment: A Socio-Demographic Analysis for the Euro Area

Economic Determinants of Employment Sentiment: A Socio-Demographic Analysis for the Euro Area

Spectral Analysis of Business and Consumer Survey Data

Employment Uncertainty a Year after the Irruption of the COVID-19 Pandemic

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