Contents

The Role of Uncertainty in Forecasting Employment by Skill and Industry

Sakutukwa, Tutsirai / Yang, Hee-Seung

Abstract

We show that the macroeconomic uncertainty series from Jurado, Ludvigson, and Ng (2015) contains information to forecast employment. The results indicate that the uncertainty measure is weak at forecasting the skilled labour but significantly carries forecasting information on the unskilled labour. The forecasting information increases if the sample is restricted to construction and manufacturing industries. Using rolling regressions to conduct a simulated out-of-sample forecasting exercise, we find that the uncertainty measure contains forecasting information for the unskilled labour in those industries for two quarters ahead. By providing detailed information about the forecasting power of uncertainty by skill and industry, this study will be helpful in designing more efficient labour market policies.

Issue Date
2018-10
Keywords(Author)
employment; forecasting; Uncertainty; unskilled labour
Citation
APPLIED ECONOMICS LETTERS, v.25, no.18, pp.1288 - 1291, 2018
DOI
10.1080/13504851.2017.1418069
Journal Title
APPLIED ECONOMICS LETTERS
Start Page
1288
End Page
1291
ISSN
1350-4851
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