The role of uncertainty in forecasting employment by skill and industry

Tutsirai Sakutukwa, Hee Seung Yang

Research output: Contribution to journalArticle

1 Citation (Scopus)

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.

Original languageEnglish
Pages (from-to)1288-1291
Number of pages4
JournalApplied Economics Letters
Volume25
Issue number18
DOIs
Publication statusPublished - 2018 Oct 24

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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