Forecasting Macroeconomic Labour Market Flows: What Can We Learn from Micro-level Analysis?

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Abstract

Forecasting labour market flows is important for budgeting and decision-making in government departments and public administration. Macroeconomic forecasts are normally obtained from time series data. In this article, we follow another approach that uses individual-level statistical analysis to predict the number of exits out of unemployment insurance claims. We present a comparative study of econometric, actuarial and statistical methodologies that base on different data structures. The results with records of the German unemployment insurance suggest that prediction based on individual-level statistical duration analysis constitutes an interesting alternative to aggregate data-based forecasting. In particular, forecasts of up to six months ahead are surprisingly precise and are found to be more precise than considered time series forecasts.
Original languageEnglish
JournalOxford Bulletin of Economics and Statistics
Volume80
Issue number4
Pages (from-to)822-842
Number of pages21
ISSN0305-9049
DOIs
Publication statusPublished - Aug 2018

Bibliographical note

Published online: 17 November 2017

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